Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

MESSAGE FROM THE QUEEN

INCOME TAX

The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:—
I have received your Address praying that on the ratification by the Government of Denmark of the Protocol set out in the Schedule to an Order entitled the Double Taxation Relief (Taxes on Income) (Denmark) Order, 1966, a draft of which was laid before your House, an Order may be made in the form of that draft.
I will comply with your request.

THE VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:—
I have received your Address praying that on the ratification by the Government of Norway of the Protocol set out in the Schedule to the draft of an Order entitled the Double Taxation Relief (Taxes on Income) (Norway) Order 1966, a copy of which was laid before your House, an Order may be made in the form of that draft.
I will comply with your request.

PRIVATE BUSINESS

EAST KILBRIDE BURGH BILL (By Order)

Second Reading deferred till Monday, 7th November, at Seven o'clock.

Oral Answers to Questions — BOARD OF TRADE

Inessential Imports (Licensing System)

Mr. Mikardo: asked the President of the Board of Trade whether he has examined the imported toy called a Cong Buster which was sent to him by the hon. Member for Poplar; and whether, in Great Britain's present economic circumstances, he will put into force the licensing system so as to keep out such inessential imports.

The Minister of State, Board of Trade (Mr. George Darling): Much as I, too, dislike this toy it would be extremely difficult—indeed, for all practical purposes, impossible—to use the import licensing system to prohibit its sale over here.

Mr. Mikardo: Is my right hon. Friend aware that he and his colleagues cannot possibly hope to convince over 20 million people that they must forgo wage increases in order to defend the pound, and ½ million people that they must accept unemployment in order to defend the pound, if the Government permit the defences of the pound to be dissipated by the importation of rubbish without any let or hindrance?

Mr. Darling: I appreciate my hon. Friend's point, but we cannot use the import licensing system for other than strictly commercial purposes. There are other means of stopping the importation of unnecessary and offensive articles which my hon. Friend might like to consider.

Aircraft Noise (Central London)

Mr. Whitaker: asked the President of the Board of Trade what is the present level of aircraft noise over Central London; how this compares with previous years; and what is the maximum tolerable amount under his regulations.

The Minister of State, Board of Trade (Mr. Roy Mason): Noise limits are imposed, and regular measurements made, only at the monitoring points near Heathrow; but the height of aircraft over Central London is controlled and we estimate that noise from individual aircraft in this area rarely exceeds 100 PNdB.


Disturbance has increased, mainly due to growth in traffic, but I cannot quantify this.

Mr. Whitaker: Is my hon. Friend aware that even before Concord a growing number of the neighbours of my right hon. Friend the President of the Board of Trade found the present level of noise intolerable? It is getting worse. Will not my hon. Friend do the same as Paris and ban fights over Central London?

Mr. Mason: Not at this stage. Few aircraft departing from Heathrow fly over Central London. But most that come in have to fly over Central London. However, there are strict limits on their height. None flies lower than 2,000 ft.

Mr. A. Royle: As the life of those living below the glidepath to London Airport, particularly in Richmond and Barnes, is becoming intolerable, will the hon. Gentleman make it plain that his Ministry will take steps to deal with the matter by such measures as raising the angle of the glidepath when the wind is over a certain velocity rather than put forward public relations suggestions? This is a matter which is causing concern to hundreds of thousands of people in London.

Mr. Mason: I sympathise with all those residing near airports and suffering unnecessary perturbation. Some of the aircraft fly below the required level. and consequently the noise increases. But it is not possible for us to apply too strongly very strict limits on pilots making approaches to the aerodromes and thus endanger the lives of those on board.

Mr. R. Carr: Does the hon. Gentleman realise that, while we all accept that there is no immediate or magic cure for this problem, there must be a positive policy to do something about it? Sympathy is not enough. Will he recall the promises which the Prime Minister made during the 1964 election?

Mr. Mason: I cannot recall my right hon. Friend's promises. It is not just sympathy. As the right hon. Gentleman knows very well, next month there is to be an international noise conference in London. At least 27 countries may be participating, all with a view to trying to rectify this growing problem.

Trade with Cuba

Mr. Winnick: asked the President of the Board of Trade by how much British exports to Cuba have increased in the last three years; and what action is being taken to continue to develop trade with Cuba.

Mr. Mason: British exports to Cuba, which had fallen to £2·1 million in 1963, were £15·1 million in 1965. My Department offers the same services to British industry to develop trade with Cuba as are offered for trade with other countries. We cannot, however, permit the export of strategic goods to Cuba.

Mr. Winnick: Can my hon. Friend give details of pressure from foreign countries to stop us increasing our trade with Cuba? Can he give a firm guarantee today that in no circumstances will we allow ourselves to be put in the position that we stop increasing our trade with that country?

Mr. Mason: I am not aware that we have been pressurised as such.

Coastguard Station, Ilfracombe (Electricity Supply)

Mr. Thorpe: asked the President of the Board of Trade whether he is aware that the coastguard station and cottages at Ilfracombe, North Devon, are without electricity, that the station cannot therefore make direct radio contact with the lifeboat at sea, and that radio messages have to be transmitted to Hartland Point some 20 miles distant and then telephoned back; and whether, in the interests of safety, he will authorise the installation of mains electricity at this station.

Mr. Mason: The present arrangements do not prejudice safety. It is common practice for communications with lifeboats to be routed through the coastguard district headquarters. It would be for my right hon. Friend the Minister of Public Building and Works to authorise the installation of mains electricity.

Mr. Thorpe: Since the coastguard station is under the responsibility of the Board of Trade, would not the Minister agree that it would never be his wish to pass the buck? Is it not ludicrous that a coastguard station is still lit by gas, that no radio message can be received and that it has to be beamed 20 miles away to Hartland or Mullacott Cross? In the interests of saving life, surely it is not too


much to ask that the station should be lit by electricity and should have a radio set to receive messages from sea.

Mr. Mason: As to the safety at sea problem, the present arrangements are satisfactory and, so far, no difficulties have arisen. As to electrifying the three cottages concerned, an estimate has been given that the cost would be £6,900. I understand, however, that the electricity authority in the region concerned is aware of this and that it will be involved in the authority's plans for the future.

Ships (Seaworthiness)

Sir B. Janner: asked the President of the Board of Trade (1) if he will introduce legislation to make it compulsory for the owners of sea-going vessels to have third party insurance for damage or injury to passengers and cargo;
(2) whether, in view of the accidents which have occurred at sea recently, he will make it the duty of a shipowner to provide a seaworthy ship in contracts which are not subject to the Carriage of Goods by Sea Act, 1924, as well as those which are subject to that Act; and whether he will make it illegal for carriers by sea to contract themselves out of any obligation for the payment of damages caused by the negligence of the carriers or their servants, agents or others.

Mr. Mason: It is already an offence to send a British ship to sea in such an un-seaworthy state that the life of any person is likely to be endangered. Nothing in the contract of carriage between a shipowner and his customer can affect this obligation.
In the case of cargoes subject to the Carriage of Goods by Sea Act, 1924, the shipowner is normally under a legal obligation to pay compensation for damage due to negligence. There is no evidence to suggest that it is necessary to make insurance in respect of this liability compulsory.
I am not convinced there is a case for amending the law to cover all other contracts of carriage by sea in the way my hon. Friend suggests, but I am considering the issues raised in connection with a recent incident.

Sir B. Janner: Is my hon. Friend aware that there will be considerable astonishment at his reply in view of the fact that it is understood that contracts can, and

do, contain exemptions on the back—I have one in my hand at the moment—which make it impossible for a claim, according to the contract, to be sustained even if the ship is unseaworthy? Will my hon. Friend go into the matter again and make sure that the law is sufficient to cover these cases?

Mr. Mason: Perhaps my hon. Friend will let me have details of the case he has in mind, and I will certainly look into it.

Mr. Ridsdale: Is it the intention of the Minister to introduce national registration for small ships that ply for hire? A considerable number of accidents were caused in the summer and we wish this system to be brought in because lives are at stake.

Mr. Mason: Although we are considering how best we can improve the safety of these small vessels which ply for trade around the coast, we have not at this stage seriously considered national registration of all these craft.

B.O.A.C. and Bofort Limited

Mr. Mikardo: asked the President of the Board of Trade whether there is any cost to the public revenues arising out of the acquisition by the British Overseas Airways Corporation of the shares held by Fortes (Holdings) Limited in Bofort Limited.

Mr. Mason: No, Sir. The cost will be met from B.O.A.C.'s internal resources.

Mr. Mikardo: While thanking my hon. Friend for that gratifying Answer, may I ask whether he is aware that the dissolution of this unseemly marriage between B.O.A.C. and Fortes gives great satisfaction to those of us on this side who pressed that it should never take place and were told by the Government for their pains that they were talking nonsense?

Mr. Mason: Yes, it is pleasing.

Aircraft Accident, Ljubljana (Inquiry)

Mr. A. Royle: asked the President of the Board of Trade if he will make a statement on the air crash at Ljubljana.

Mr. Rankin: asked the President of the Board of Trade if he has considered the report issued by the Yugoslav Inquiry Commission on the accident to a


Britannia airliner near Ljubljana, resulting in the death of 98 persons, on 1st September in which the pilot is blamed; what inquiry he intends to make; and if he will make a statement.

Mr. Mason: An inquiry has been instituted by the Yugoslav authorities in accordance with international procedure, and an inspector of accidents from the Board of Trade is participating in it. A communiqué on the progress of the investigation issued in Belgrade on 17th September included a statement that the pilot flew incorrectly below the normal approach path but that the Commission had not yet been able to establish the reason for the low flight. The inquiry is continuing, and this is one of the issues to be determined.

Mr. Royle: Since the chief pilot involved in this tragedy was one of my constituents and, I understand, had been flying very close to the fatigue limits, what action are the Government taking to deal with companies which have been breaking pilot fatigue regulations? Is any revision of the Air Navigation Order planned? In view of the possibility of a mistake occurring due to lights on the road at Ljubljana, will the hon. Gentleman require a minimum number of training flights in varying conditions at difficult airports in future?

Mr. Mason: I am not aware that the pilot concerned had exceeded the flying hours involved. Secondly, as the hon. Member knows, we are considering fresh flight time limitations, and matters of this kind will be taken into consideration.

Mr. Rankin: Will my right hon. Friend recollect that the Munich disaster was blamed, as happens too often, on the pilot, who, fortunately, lived to prove his innocence? Will my hon. Friend assure us that Munich will not be repeated at Ljubljana and that there will be a full inquiry into the causes of that disaster and not the hasty run-over that we have had recently?

Mr. Mason: The full inquiry is taking place and it would be wrong at this moment to prejudge the results.

Mr. R. Carr: Will the Minister, through the appropriate international channel:—because I realise that this is an international matter—take what steps he can to make sure that pilots do not

get blamed in this way through intermediate reports and that this sort of statement is not issued until a complete report is available?

Mr. Mason: I am obliged to the right hon. Gentleman for those comments. They certainly will be noted.

Light Aircraft (Losses)

Mr. Costain: asked the President of the Board of Trade what was the annual loss of light aircraft and occupants in the last five years in the light aircraft channel from Folkestone to Gris Nez.

Mr. Mason: None in 1962 and 1963. One aircraft ditched near a ship in 1964 and one near the shore in 1965. One pilot was killed. A helicopter disappeared in July, 1966, and the pilot's body was later recovered from the sea.

Mr. Costain: In thanking the Minister for that Answer, may I ask whether he is satisfied that the radar screen is sufficient to locate these aircraft at short notice?

Mr. Mason: I do not think that that is the problem. As the hon. Member will have noticed from my reply, the flying is done in a light-aircraft channel between England and France, and only two small aircraft have been affected in two years. Both came down into the sea because of engine trouble. The other accident was to a helicopter.

Cadco

Mr. William Hamilton: asked the President of the Board of Trade if he will make a further statement on the results of the report on the Cadco affair in Glenrothes, Fife; and whether any prosecutions are now imminent.

Mr. William Hamilton: asked the President of the Board of Trade whether he has yet received the report of the Lord Advocate on the Cadco affair; and what action he intends to take.

Mr. Darling: With permission, I will answer this Question and No. 7 for Written Answer together.
After investigation by the Procurator Fiscal, and after considering the evidence and the circumstances of the case, the Lord Advocate has decided that criminal proceedings in Scotland are not warranted. The Director of Public Prosecutions considers that, since Denis


Henry Loraine and Thomas Chambers Windsor Roe, the persons principally concerned, are in the United States of America and Switzerland, respectively, and subject to criminal proceedings in those countries, there is no action he can take at the present time. Accordingly, pending the conclusion of those proceedings, he has deferred his decision as to the action, if any, which should be taken.
My right hon. Friend expects to publish the report of the inspectors by the end of next month.

Mr. Hamilton: Is my right hon. Friend aware that that reply will give a certain measure of satisfacton in that the report is to be published in due course? In view, however, of the fact that Mr. Loraine and Mr. Roe are likely to be in Switzerland and America for a prolonged holiday, will my right hon. Friend undertake that the report will be published in a completely unexpurgated form and that nothing will be deleted from it?

Mr. Darling: Yes, Sir.

Import Surcharge

Mr. Dodds-Parker: asked the President of the Board of Trade what increase in imports he is expecting in the first three months after, compared with the three months before, the removal of the 10 per cent. surcharge; and what action he is proposing to correct this increase.

Mr. Darling: Some temporary increase in imports is expected to take place after the surcharge is removed, but this was fully taken into account when my right hon. Friend the Chancellor of the Exchequer said that we should achieve a surplus for 1967 as a whole on current and capital account combined. My right hon. Friends the Prime Minister and the Chancellor of the Exchequer explained in July that the far-reaching economic measures taken then were designed to improve our general economic position and to restore our balance of payments.

Mr. Dodds-Parker: Will the Minister of State give an assurance that when he sees how the figures work out he will on no account take any action prejudicial to our partners in E.F.T.A.?

Mr. Darling: That undertaking has already been given by the Prime Minister.

Mr. Sheldon: Is my right hon. Friend aware that in each of the past 10 years,

despite the heavy inflation in some of those years, imports have risen in real terms steadily year by year? In view of the massive encouragement being given by the removal of the surcharge, has he any reason to expect that we shall see anything other than a massive increase in imports?

Mr. Darling: Yes, Sir. The facts, as we see them, were given in a series of replies in the House, and we have come to the conclusion that although, as I have said, there will be some increase in imports, we do not think that it is likely seriously to interfere with the balance of payments projects which we have in mind.

Mr. Barber: What estimate has the Board of Trade made of the increase in the three months following the removal of the surcharge? Obviously the Government have made some estimate, otherwise they could not be planning ahead in a sensible way. If they have made an estimate, why can it not be given?

Mr. Darling: Estimates in these circumstances are likely to be very temporary ones and perhaps not very useful, in the circumstances. We have decided that we are not going to introduce import quotas. We shall see how this goes along, and we think that the judgment which we have taken will work out all right.

Mr. Dickens: asked the President of the Board of Trade what steps he proposes to take to control imports following the lifting of the import surcharge.

Mr. Darling: None.

Mr. Dickens: Is my right hon. Friend aware that that negative response is most disappointing to many of us on this side of the House? Does he not feel that there is a very strong case for examining the need for selective, flexible quotas to keep out non-essential imports; otherwise, how does his right hon. Friend propose to keep down the inevitable increase in imports which will occur when economic expansion is resumed?

Mr. Darling: My right hon. Friend the Chancellor of the Exchequer explained on 26th July the difficulties about using import quotas for the purposes which my hon. Friend has mentioned. First of all, they would be only a temporary remedy, and we have


already used the import surcharge in substitution for them on temporary grounds. If we were now to introduce quotas in these circumstances, the first effect would be a retaliation from the countries concerned and, as the hon. Member for Cheltenham (Mr. Dodds-Parker) has said, the E.F.T.A. countries would seriously question such measures and, moreover, the quotas would not remove the need for disinflationary action.

Sir G. Nabarro: Would not the right hon. Gentleman agree at once that if import quotas were imposed, they would deny opportunities to countries oversea, notably under-developed countries, to earn sterling with which to buy British exports? Is not the suggestion of the hon. Member for Lewisham, West (Mr. Dickens) absolutely fallacious?

Mr. Darling: That is the reason why I mentioned the retaliatory character of quotas.

Mr. O'Malley: Does not my right hon. Friend recognise that the steel industry is a special case in this respect? A very large increase in dumped steel imports is likely in the coming months, which will affect the steel industry in the right hon. Gentleman's constituency and my own at a time of falling demand and short-time working.

Mr. Darling: The question of dumping is another matter altogether. We can deal with dumped imports.

Development Areas (Publicly-Owned Industries)

Mr. Dalyell: asked the President of the Board of Trade what steps he has taken to promote experiments in creating small publicly-owned industries in areas of underemployment.

Mr. Darling: None, Sir. The large number of publicly-owned factories, advance factories and others, now being built in the development areas together with the other financial assistance we provide to firms in these areas constitute the most valuable means of assisting further employment. These factories also provide opportunities for small-scale new industry to establish itself in these areas.

Mr. Dalyell: But, regrettably, is the Minister aware of the six empty advance factories in the Bathgate area at the present time, involving 40,000 sq. ft.? Is he aware of the 9 per cent. unemployment rate? Does his right hon. Friend

recollect that in happier economic times, in October, 1965, I went to him and pleaded with him to conduct modest experiments along the lines of the Labour Party election manifesto on this subject of October, 1964?

Mr. Darling: Yes, Sir. I am aware both of the statements and the circumstances. But what we want to get in places like Bathgate is established industries which wish to expand in the development areas, and we are seeking such employers and industrialists for the factories which are available.

Mr. Barber: Will the right hon. Gentleman persuade his colleagues in the Labour Government to try, as a novel experiment for this Government, to encourage private enterprise?

Mr. Tinn: As, at the present time, free enterprise seems unlikely to give us the capital investment that we need for the future, does my right hon. Friend not agree that this is peculiarly the right time to make public investment to provide for that need?

Mr. Darling: I have been in most of the development areas during the recess and in the last few weeks. The most encouraging aspect of the situation there is the increasing number of inquiries for advance factories.

Mr. Edward M. Taylor: Does the right hon. Gentleman know that the situation is not encouraging? The report published this morning showed that production was stagnant in the first half of the year, private investment has fallen sharply in Scotland, we have more than three unemployed Scots for every available job, and the squeeze is only beginning. What is the Minister going to do about it?

Mr. Darling: During the last few weeks, I have laid foundation stones and opened advance factories in Scotland, every one of which has been taken by industrialists who are getting ready to move in.

Mr. Dalyell: In view of the unsatisfactory nature of that reply, I shall be raising the matter during the Adjournment debate which you have given me on this subject on Monday.

European Free Trade Area (Motor Vehicles)

Mr. Dalyell: asked the President of the Board of Trade if he will make a statement on negotiations with European


Free Trade Area countries on the subject of more favourable tariff arrangements for British motor vehicles.

Mr. Mason: The chief problem is the revenue duties charged in Norway and Finland. Her Majesty's Government take every opportunity of impressing on the Norwegian and Finnish Governments their concern that E.F.T.A. exporters of important classes of motor vehicles receive no benefits over exporters from other countries. My right hon. Friend will be pursuing this matter further while he is in Lisbon for the current E.F.T.A. meeting.

Mr. Dalyell: Is my hon. Friend aware that we wish him the best of good fortune in this matter, which has a great effect on the operations of the British Motor Corporation in Bathgate, a high percentage of whose exports go to E.F.T.A. countries?

Mr. Mason: Our contention is that certain E.F.T.A. countries are breaching the spirit of the E.F.T.A. rules. My right hon. Friend the President of the Board of Trade will be raising this in the course of his talks, and it would be appropriate for my hon. Friend to raise this again at a later date.

Bankruptcies

Mr. J. H. Osborn: asked the President of the Board of Trade if he will tabulate the numbers of bankruptcies recorded in the quarters ending 30th September, 1965, 31st December, 1965, 31st March, 1966, 30th June, 1966, and 30th September, 1966, respectively.

Mr. Darling: The number of receiving orders and administration orders in bankruptcy for each of the quarters was as follows:
to 30th September, 1965, 780: 31st December, 1965, 953; 31st March, 1966, 1,089; 30th June, 1966, 857; and 30th September, 1966, 902.

Mr. Osborn: Does not that show a shocking trend and prove that the Government are making the operation of private businesses intolerable? In view of those unfortunate figures, will arrangements be made to publish them monthly in the Board of Trade Journal?

Mr. Darling: They are published regularly in the Library. The reports for

the years up to and including 1965 are available. This trend is in keeping with previous years.

Airports (Fog Landing Aids)

Mr. A. Royle: asked the President of the Board of Trade what action has been taken to introduce better fog landing aids for use during the coming winter at airports throughout the United Kingdom.

Mr. Mason: Instrument landing systems enabling aircraft to land in conditions of poor visibility and low cloud base are already installed at the following United Kingdom civil airports: London (Heathrow), London (Gatwick), Stansted, Prestwick, Manchester, Birmingham, Liverpool, Glasgow, Belfast, Edinburgh, Aberdeen, Stornoway, Bournemouth and Middleton St. George. The performance of these systems is regularly checked and where possible is being improved to enable landings to take place in more critical conditions.
In addition a programme to install higher performance equipments at a large number of airports has been embarked upon. The first step includes the ordering of equipments of advanced design for London (Heathrow), to be delivered in 1967, which will in due course enable autolanding to be achieved.

Mr. Royle: I am grateful to the hon. Gentleman for his reply. Is there any chance of hurrying up delivery of this new equipment, and does it include transmissometers, which I gather are being used on many airports overseas?

Mr. Mason: I do not think that we can possibly get the equipment which we require before the delivery date of early 1967. We have in mind installing similar equipment in Birmingham and Stansted so that technical evaluations can also take place.

Mr. Rankin: Is it not the case that aircraft which use this landing system must carry the proper equipment to use it? How many aircraft still lack it?

Mr. Mason: I could not give the number without notice.

Bahamas (Exhibition Site)

Mr. Fisher: asked the President of the Board of Trade if he will accept the offer made by Freeport in the Bahamas


of a 100 acre site for a permanent export exhibition.

Mr. Mason: I have not received any offer but a representative of the Port Authority has discussed his ideas with my Department.

Mr. Fisher: I understand that the hon. Gentleman will be receiving an offer. When he does so, will he bear in mind that Freeport is perhaps the fastest growing city in the world, 60 miles from the coast of Florida? It already attracts about half a million rich American business men and tourists every year, and therefore this may be a great opportunity for increasing our exports in an expanding market.

Mr. Mason: Discussions took place last week, and the port authority's representative is considering the next steps. Any scheme must depend on the support from British industry, and we must await its reactions.

Industrial Investment

Mr. Patrick Jenkin: asked the President of the Board of Trade what proposals he has to arrest the decline in the level of industrial investment.

Mr. Stratton Mills: asked the President of the Board of Trade if he will make a statement on the estimated drop in investment in manufacturing industry of 7 per cent. to 8 per cent. in real terms in 1967, as disclosed in the recent survey of investment prepared by his Department.

Mr. Hooley: asked the President of the Board of Trade whether he will consider providing a special premium rate of investment grants to industry during the period of the prices and incomes freeze to encourage re-equipment and capital investment in manufacturing industry against the period of renewed economic expansion.

Mr. Dickens: asked the President of the Board of Trade what further proposals he has for increasing the rate of private capital investment in manufacturing industry.

Mr. Bruce-Gardyne: asked the President of the Board of Trade whether in view of the effect of the replacement of investment allowances and free depreciation in development districts by grants under the Industrial Development Act, as demonstrated by the report of the Confederation of British Industry's latest survey

of manufacturers' investment intentions, a copy of which has been sent to him, he will now take steps to reintroduce free depreciation in development areas, increase the value of investment grants and accelerate their payment.

Mr. Darling: As my right hon. Friend the Chancellor of the Exchequer said in answer to a Question by the hon. Member for Worcestershire, South (Sir G. Nabarro) on the 25th October the Government are watching the trend of investment in industry very closely and are ready to discuss the situation with representatives of industry at any time.

Mr. Jenkin: Will not the right hon. Gentleman recognise that one of the surest ways of making industry put off its plans and delay its investment decisions is to delay a decision on the question whether they will introduce grants and at what time, whether they will increase them, and whether they are to give some extra inducement? It is the delay that is causing failure to reach decisions.

Mr. Darling: I am not sure that that is entirely correct.

Mr. Stratton Mills: Would not the right hon. Gentleman agree that the Board of Trade survey is really much too optimistic in showing a turndown of 6 per cent. to 7 per cent., in conflict with the Confederation of British Industry which shows a 15 per cent. to 25 per cent. turndown in manufacturing industry? Is it not clear that we are heading for the greatest slump in manufacturing industry investment since the 'thirties, and will the right hon. Gentleman say whether he is studying a proposal for increasing or speeding up the cash grants?

Mr. Darling: The C.B.I. survey does not necessarily suggest a greater decline in investment than the Board of Trade survey, and both of them are examined very carefully in the Board of Trade Journal published today, which is well worth studying. The speeding up of the payment of grants is one of the matters which is being considered during the talks which the Chancellor mentioned.

Mr. Bruce-Gardyne: As the Minister's Department has told me that the new system of investment grants is worth about one-third less than the old system, would not the right hon. Gentleman agree that


there is a case for reintroducing free depreciation in the development areas, for a temporary period at any rate, to prevent this appalling decline in manufacturing investment to which my hon. Friend referred?

Mr. Darling: The Board of Trade has not told the hon. Gentleman that the investment grants will produce a lower yield, so to speak, than the investment allowances. The answer given to him yesterday was that a comparison between these figures was, however, not meaningful, and went on to explain why.

Mr. Manuel: With regard to investment grants for new plant and machinery, would it be possible, until the 40 per cent. grant is paid in development areas, for firms, and especially small firms, to receive loans from my right hon. Friend's Department to tide them over until the grant is available?

Mr. Darling: That is one of the suggestions which will be considered in the discussions with industry.

Mr. Barber: As the Board of Trade's own forecast for next year suggests a drop in industrial investment of between 7 per cent. and 8 per cent., what on earth does the right hon. Gentleman mean by saying that he is watching the trend? Are not he and his hon. Friends concerned about the present and prospective fall in capital investment in industry, and if so, what are they going to do about it? Does the right hon. Gentleman realise that the impression which he and his colleagues give is of floundering about with no idea what to do next, apart from increasing the pool of unemployed?

Mr. Darling: Of course we are concerned about these estimates of a possible turndown of investment in industry. Of course we are concerned about what may be a lack of confidence in markets in the future, but these matters will be dealt with by my right hon. Friend the Chancellor when he makes a statement on them.

Mr. Jenkin: In view of the thoroughly unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment at the earliest possible opportunity.

Foreign Ships (Passenger Safety)

Mr. van Straubenzee: asked the President of the Board of Trade what

action he is taking through the Inter-Governmental Maritime Consultative Organisation or otherwise to safeguard the large number of British passengers sailing in foreign ships from British ports.

Mr. Mason: An urgent study of fire safety standards for passenger ships is being made by I.M.C.O., the United Nations agency concerned. It is expected that the Assembly of I.M.C.O. will approve at the end of November new recommendations concerning the safety of existing ships. The question of standards for new passenger ships is also being studied urgently. The Board of Trade, representing the United Kingdom, is playing a full part in all this work.

Mr. van Straubenzee: Does the hon. Gentleman realise that the Answer will be received with considerable satisfaction by those who have been in touch with certain unhappy incidents? Can he explain briefly how these new proposals, if adopted, will be enforced on foreign ships sailing from British ports, which is what the Question refers to?

Mr. Mason: I.M.C.O., the Inter-Governmental Maritime Consultative Organisation, will make an international recommendation. There will be a time limit in which it will ask the maritime countries to accept its recommendations flowing from the November meeting.

S.S. "Lakonia" (Report)

Mr. van Straubenzee: asked the President of the Board of Trade whether he has yet received the official translation of the Report of the Superior Court. S.E.N.A., in Greece inquiring into the loss of the "Lakonia"; and whether he will make a statement upon its findings.

Mr. Mason: Yes, Sir, I have received the official translation of this Report. It upheld the findings of the lower court as regards the origin of the fire and responsibility for the subsequent events and it increased the severity of the findings as regards negligence of certain members of the crew of the "Lakonia".

Mr. van Straubenzee: Does the hon. Gentleman realise that since a considerable number of British passengers were involved, this is a matter of lively concern in this country, and can he explain whether the Government have made any representations as to the liability of the owners? I appreciate that the court


increased the liability of the crew to the owners, but what about the owners who allowed this decrepit hulk ever to go to sea?

Mr. Mason: I cannot clearly and honestly answer the question, but I have taken note of what the hon. Gentleman has said, and I shall write to him in due course.

Mr. Webster: Is it not the truth that if an international convention is signed as a result of a disaster, it usually applies to new vessels, and not to existing ones? Can something be done to put this right?

Mr. Mason: If the hon. Gentleman heard my original reply correctly, he will have noticed that I purposely stressed "existing vessels", and said that new vessels were also being urgently considered.

Industrial Development (Okehampton)

Mr. Peter Mills: asked the President of the Board of Trade what plans he has to encourage industry in the Okehampton area of Devon.

Mr. Darling: I am always prepared to consider sympathetically I.D.C. applications for projects suited to the resources of the area.

Mr. Mills: Does the Minister realise the extreme disappointment that exists in this area of Devon because of the fact that an industrial firm that was coming is now not coming, due to the economic squeeze imposed by the Government? Will he take steps to see that some form of help such as is given in development areas is given in this area? If he does not we shall never overcome this serious problem.

Mr. Darling: This is not the only firm that has decided, in the past few years, not to come to this area. On the basis of the unemployment situation—as I have already explained to the hon. Member—it would be difficult to schedule this as a development area, but we certainly should look at the reasons why firms in the past have not followed up their applications.

Industrial Development Act

Mr. Corfield: asked the President of the Board of Trade how many additional

staff his Department will have to recruit to administer the Industrial Development Act; and how many of those have so far been recruited.

Mr. Darling: About 1,200 staff are required to administer investment grants. Nearly all the 215 senior posts have been filled. For the 770 junior posts, 480 suitable applicants have so far been selected. Some 200 clerical and supporting staff are being recruited locally.

Mr. Corfield: Does not the Minister's Answer prove quite clearly that the machinery of this Act is wholly ineffective to act with the speed and efficiency which is required to deal with the economic circumstances which the Government's folly have produced?

Mr. Darling: On the contrary, as a result of the measures that we have taken—as we have explained time and time again—the investment grant system will be far more helpful to expanding British industrialists than the old investment allowances system, and the staff and cost of this operation will be well worth while.

Mr. W. Baxter: In view of the procrastination that exists and the difficulties of getting satisfactory replies from the Beard of Trade when applications are made to it, will the Minister set up a searching inquiry into the administration of his organisation in order to bring it to the state of efficiency that we would expect in a first-class business?

Mr. Darling: I do not know what my hon. Friend means in this connection, because no applications could have been dealt with negligently, since no applications have yet been asked for.

Motor Cars (Export)

Mr. Luard: asked the President of the Board of Trade how many passenger cars were exported in the first nine months of 1966; and how these figures compare with the figures for the same period in 1964 and 1965.

Mr. Mason: The following is the Answer: 440,000, 513,000 and 477,000.

Mr. Luard: Do not these figures show that the motor industry was suffering increasing difficulties in a very important part of its market even before the July measures were introduced? Does not


this make it more important to enable the industry to reduce its unit costs and to increase its exports by some relaxation of the restrictions imposed in the home market?

Mr. Mason: My hon. Friend is generally correct. Falls have occurred this year in exports of cars to the Common Market and to the European Free Trade Area, and I indicated earlier in Question Time one reason why they have fallen in respect of E.F.T.A. But sales to North America show a substantial increase.

Industrial Development (South-West)

Mr. Peter Mills: asked the President of the Board of Trade what steps his Department is taking to encourage science-based industries, such as electronics and medical products, to move to the South-West.

Mr. Darling: The attractions of the South-West development area and the incentives available to employers moving there are pointed out in discussions with industrialists who are seeking suitable locations for factories.

Mr. Mills: Does not the Minister agree that the South-West—particularly the Exeter area, in close proximity to Exeter University—is ideally suited for this type of industry? This would not only provide help and encouragement to young people to find technical jobs but would help to solve the problem of unemployment in the South-West.

Mr. Darling: That is true, but the difficulty is that so many other areas are in the same position, including Bathgate and Linwood.

Metric System

Mr. Ridley: asked the President of the Board of Trade whether he will adopt the metric system for all units of measurement in the United Kingdom.

Mr. Darling: No, Sir. The Government's view is that the first step is to encourage industry to adopt the metric system.

Mr. Ridley: Will it not be inevitable, in the end, that we shall have to move towards the metric system? In this case, would it not be a very good earnest of

the Government's intention with regard to joining Europe to take the step positively and early rather than leaving it to industry?

Mr. Darling: I do not think that the hon. Member has thought out the difficulties and complications that would arise if we tried to impose the metric system—including, perhaps the decimalisation of currency—compulsorily upon industry, the retail trade, and all the other trading activities of the country at the same time. It is a little too much to ask.

Scotland and the Continent (Air Services)

Mr. Buchanan-Smith: asked the President of the Board of Trade when he will announce the result of the appeal by Caledonian Airways to operate direct air services from Scotland to the Continent.

Mr. Mason: Very shortly. The Commissioner's report to the Board of Trade was greatly delayed in this instance by a dispute between the parties as to the record of evidence.

Mr. Buchanan-Smith: Does the hon. Member recognise that there is a need and, indeed, a demand in Scotland for direct air services to the Continent? Will he, therefore, do all he can, in the interests of Scotland, to make sure that the decision is speeded up, and that it is a favourable one?

Mr. Mason: I shall have to await the Commissioner's findings.

Mr. R. Carr: In considering this matter, will the hon. Gentleman bear in mind how much the travelling public would benefit by the injection of more enterprise and competition in air transport?

Mr. Mason: Certainly.

Industry (United States Investment)

Mr. Winnick: asked the President of the Board of Trade if he will make a further statement on the increase of United States investment in British industry.

Mr. Darling: I have nothing to add to the reply which my hon. Friend received in answer to his Question on 14th July.

Mr. Winnick: Is my right hon. Friend aware of the growing concern in this country at the increasing number of American take-over bids in British industry? Does not he agree that it is very stupid of the Tory Opposition to oppose nationalisation while remaining indifferent to foreign take-over bids in British industry?

Mr. Darling: Any take-over bids are examined by the Board of Trade, and if the Board of Trade considers it necessary they are referred to the Monopolies Commission for examination.

ECONOMIC PLANNING

Ql. Mr. Marten: asked the Prime Minister what further steps he proposes to co-ordinate the work of Ministers engaged in economic planning.

Mr. Frank Allaun: asked the Prime Minister if he will instruct the Ministers concerned to co-ordinate measures to prevent heavy unemployment.

The Prime Minister (Mr. Harold Wilson): No new steps or measures of co-ordination are needed, Sir.

Mr. Marten: Does that mean that the Prime Minister is satisfied with the Government's economic planning? Will he read again the National Plan? Does not he agree that this has made a nonsense of purposive planning? Is not the thing to do to agree with the Conservative Party that what we really want, apart from productivity, is competition and incentive?

The Prime Minister: The measures taken by the Government are, in the Government's view, most likely to provide the basis on which we can advance in future without the danger of lurching into repeated balance of payments crises such as we have had all along. As for competition, it is a very vague prescription that we get from the Opposition. In some respects we have made key sectors of the economy—for instance, by means of a greater use of the Monopolies Commission—more likely to meet the competitive needs of industry.

Mr. Allaun: Will my right hon. Friend explain how production is to be expanded by having 500,000 men out of work after redeployment has taken place? Secondly, as many Labour M.P.s and T.U.C. leaders

regard deflation as utterly wrong, will my right hon. Friend now consider relaxing the deflationary measures before it is too late?

The Prime Minister: These matters have been debated at length on two days this week, but in answer to my hon. Friend's question, we have made clear that it is necessary to have a period when, in order to obtain a substantial redeployment of labour, we cannot contemplate any general let-up in the policies that we have taken until we are in balance, and are seen to be in balance. In respect of particular problems of investment and matters of that kind, I told the Productivity Conference—and it has been repeated by my right hon. Friend—that some of the resources that have been freed as a result of our measures could properly be used to provide stimulants to investment, and, as I have told the House, this is what we are examining.

Sir A. V. Harvey: How does the Prime Minister expect exports to increase when home consumption is going down, with the result that the price of exports is bound to be put up, as in the case of motor cars?

The Prime Minister: It has been argued in past years whether we need a large home market with overspill at lower prices, but if we have a home market which has been booming too fast the result is that important export firms cannot get the labour or other resources necessary for increasing exports. Certainly this year the position has been that many of our best export firms have order books which are far too long and also far too uncertain in delivery, than which there is no worse inhibition to increased exports.

Mr. Orme: Would not my right hon. Friend agree that his statement of 20th July, in which he referred to a figure of 2 per cent. unemployment after redeployment—reaffirmed this week by his right hon. Friend the Minister of Labour—has caused great concern in this country? Will he not give a categorical assurance that the Labour Government will not stand for a level of 500,000 unemployed under any circumstances?

The Prime Minister: What I said in answer to a question—and in answer to questions elsewhere—and two separate


questions were involved here—was that after redeployment this was a figure that we could contemplate, but I said that we did not envisage keeping it at that level, and the turning point from the disinflation which has been necessary to the expansion that we are all looking forward to and working for is the moment when we are in balance in our balance of payments.

Mr. Heath: Would the right hon. Gentleman tell the House what he now considers to be a realistic figure for the rate of growth up to 1970 under these policies?

The Prime Minister: No, Sir, I think that it would be very difficult to make an estimate, but I believe, as I have said a number of times, that the measures which were taken are more likely to enable us to resume rapid growth early without lurching into the crises which hon. Gentlemen opposite always had whenever we had a few months' boom.

Mr. Heath: If the right hon. Gentleman cannot give a figure for the rate of growth, can he tell us what is to be the basis of the Government's programmes in future?

The Prime Minister: The basis of the Government's programmes will be a continued expansion on the lines of the National Plan. The timing of the period of growth will depend on the speed and thoroughness with which we get into balance. Criticism does not lie in the mouth of the right hon. Gentleman, who three times expanded for eight or ten months, each time producing a bigger balance of payments deficit.

RHODESIA

Mr. Wall: asked the Prime Minister if he will make a further statement on his official correspondence with Mr. Ian Smith.

Mr. Hastings: asked the Prime Minister whether he will make a statement on the progress of the Rhodesian negotiations.

The Prime Minister: I have had no such correspondence, Sir, and, as hon. Members well know, there are no negotiations. As for the visit of Sir Morrice James to Salisbury I would refer hon.

Members to the Answer I gave on Tuesday last to a Question by the right hon. Gentleman the Member for Streatham (Mr. Sandys).

Mr. Wall: Is there a time limit to the current talks, and, if so, when does it expire? Would the right hon. Gentleman also say clearly what is causing the real difficulty—the provisions of an independence Constitution or what he has termed "a return to constitutional rule"?

The Prime Minister: It is not a question of what I termed it—it is a question of constitutional rule. I should have thought that the hon. Member would understand that the present régime is totally illegal and that it must return to constitutional rule. I have some difficulty, despite the extraordinary statement from the Rhodesian soi-disant Minister of Information about censorship, in going back on the assurance which my right hon. Friend gave at this stage, about making public the progress of the talks and of the exchanges, but I will go as far as I can.
In answer to the hon. Member's question, both matters are of importance. As I stressed in the House the other day, although I believe that it is possible to find the means of reaching a satisfactory and honourable return to constitutional rule—honourable to all concerned—there can be no agreement, obviously, unless the principles laid down by successive Governments are accepted, and, in particular, if anyone demands a braking method to hold back progress to constitutional rule, on which right hon. Gentlemen opposite know there can be no agreement.

Mr. Hastings: Will the right hon. Gentleman lose no opportunity of impressing on the House and the country the appalling risks now of failure? Does he realise that, pending mandatory sanctions, the South African economy is on a war footing and that manufacturers have been warned against ordering capital goods either from this country or from the United States? In these circumstances, would it not be criminal folly to allow these negotiations or talks—whatever the right hon. Gentleman likes to call them—to founder over the question of legalities, or obsessive concern with legalities, rather than with


the constitutional question, which means the future of the peoples of Rhodesia, which should come first?

The Prime Minister: I think that the last few words of the hon. Gentleman show at what level we should rank his contribution. If these talks founder, they will founder because those in Rhodesia will not accept the implementation of principles laid down by the previous Government and by this Government, which at any rate they have said that they accept——

Sir F. Bennett: They do not trust you.

The Prime Minister: If the hon. Gentleman wants to throw remarks of that kind about, many of us can confirm that the Rhodesians said that if they had been dealing with this Government all along and not with certain right hon. Gentlemen opposite, there might have been agreement. I am quoting from Mr. Smith whom some hon. Members opposite regard as the authority on these matters. That is what he said and I have quoted it in the House before and I said in the House and I said to Mr. Smith that I thought that it was unfair, assuring him that we do not approach these questions quite in the spirit of the hon. Members opposite——

Mr. Sandys: We don't need to be defended by you.

The Prime Minister: So far as the right hon. Member for Streatham (Mr. Sandys) is concerned, his actions up to 16th October, 1964, need no defence; since then, his actions are incapable of defence. [Interruption.]

Mr. Speaker: Order. Question Time is going.

Mr. Whitaker: Will my right hon. Friend bear in mind that, in view of the recent history of Rhodesia and the fact that Mr. Smith broke solemn guarantees which he gave both to Her Majesty's Government and to the Governor of Rhodesia, many hon. Members are convinced that it would be wrong to give Rhodesia independence until majority rule is an accomplished fact?

The Prime Minister: I am well aware of many of the reasons why we should proceed with the utmost caution and this

is what we have done. There have been broken pledges—[HON. MEMBERS: "Yes."]—not by us. There were broken pledges before U.D.I. U.D.I. itself was a totally illegal act and we have recently had the further provocation of the proposed changes in criminal jurisdiction and in the powers of detention. All these, of course, are reasons why we must proceed with the utmost caution, but it has been the view of the Government all along not to follow the advice of my hon. Friend, but to say that if we can get full and guaranteed implementation of the six principles, we could proceed to discuss it again.

MINISTRY OF AVIATION

Sir Ian Orr-Ewing: asked the Prime Minister on what date the Ministry of Aviation is to be abolished; and which Ministries will take over the various responsibilities.

The Prime Minister: I would refer the hon. Member to the Answer I gave to a Question by my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) on Tuesday last. Sir.

Sir Ian Orr-Ewing: Is the right hon. Gentleman aware that it is now many months since this decision was announced by the Government, that the aero-space and associated industries are in a condition of extreme uncertainty and that continued uncertainty cannot rebuild the confidence which is so badly needed as a result of the actions taken by his Government?

The Prime Minister: I am not so aware. I made the statement in June. The hon. Gentleman will realise the very significant problems here, particularly about the allocation between defence and the civil side, and it is right that we should get the right answer, even if it takes rather longer than we had hoped.

Mr. R. Carr: But does not the right hon. Gentleman realise that, in deciding to abolish one system of organisation—the Ministry of Aviation—before first making up his mind what to put in its place, he is breaking one of the acknowledged principles of good management, about which he so often lectures other people?

The Prime Minister: The right hon. Gentleman will recognise that I have discussed fairly fully in the House the considerations which led to this decision. The only thing which is taking the time now is the problem of the exact demarcation between defence and technology. There are certain difficulties here and, in view of the history of the great waste to the taxpayer of insufficient consideration of these questions in the past, I hope that I will be forgiven for spending a little time getting it right.

INDUSTRIAL TRAINING AND RETRAINING SCHEMES

Mr. Alan Lee Williams: asked the Prime Minister if he is satisfied with the arrangements for Ministerial co-ordination in connection with industrial training and retraining schemes; and if he will make a statement.

The Prime Minister: Yes, Sir.

Mr. Williams: Would not my right hon. Friend agree that there is considerable evidence that a number of large firms at present are not introducing training or retraining schemes? Would he consider further negotiations to enable them to overcome this difficulty?

The Prime Minister: This matter was fully debated earlier in the week and my right hon. Friend reported not only on the Government training centres but on what he described as the more important sector—industrial training. I believe that the present system, introduced by our predecessors and carried on and expanded by us, is right. If there is evidence that it is not being fully used, I am sure that my right hon. Friend would want to go into any individual case.

NUCLEAR WEAPONS

Mr. Alan Lee Williams: asked the Prime Minister what recent discussions he has had with the Prime Minister of the Union of Soviet Socialist Republics with a view to preventing nuclear proliferation.

The Prime Minister: A considerable part of my discussions with Mr. Kosygin in my two visits to Moscow in February and July was concerned with the urgent

need for a worldwide non-proliferation agreement and the means of attaining it.

Mr. Williams: Would my right hon. Friend agree that the present problem of proliferation is one of the main reasons why disarmament negotiations are impossible?

The Prime Minister: Yes, Sir. I think that in every debate we and hon. Members in all parts have said that this is the most urgent problem facing the world today, and that in the field of disarmament particularly a non-proliferation agreement is more important than any other effort. There have been difficulties, which the whole House knows were fully discussed with Mr. Kosygin on two visits this year, and my right hon. Friend has now carried these talks further with Mr. Gromyko, in New York a fortnight ago.

Mr. Blaker: Did not the Soviet Premier make it clear to the Prime Minister that one of the main obstacles to non-proliferation was the Government's proposal for an A.N.F., and is it not time that the Government made it clear that they dropped this proposal?

The Prime Minister: No, Sir. The hon. Gentleman is quite wrong. Mr. Kosygin and his colleagues have repeatedly made clear that one of the main obstacles to a non-proliferation agreement was the M.L.F., which was fanatically supported by half the previous Government.

Mr. Sandys: While it is exceedingly important to get agreement between the nuclear Powers not to disseminate their nuclear weapons or knowledge, does not the Prime Minister agree that what is perhaps even more urgent is to devise some means of giving added security to the non-nuclear Powers as an inducement to remain non-nuclear?

The Prime Minister: Yes, Sir. I think that the right hon. Gentleman is quite right here. And this applies both within the European setting and, indeed, in the very special considerations of the Asian and Middle Eastern settings. The nuclear Powers have spent some time trying to consider this problem. Indeed, Mr. Kosygin's own declaration in February was designed to give some assurance on that, though all of us feel that, whatever the difficulties are about, more is needed, as he said.

HONOURS SYSTEM

The following Written Question stood upon the Order Paper:

Mr. ARMSTRONG: To ask the Prime Minister if he will now make a statement on the Honours system.

The Prime Minister (Mr. Harold Wilson):: With permission, Mr. Speaker, I will now answer Written Question No. 38.
Starting with the New Year Honours List I propose to discontinue the practice of making recommendations concerning honours for political services of the kind which have been a feature for so many years past. Nor do I intend to recommend to Her Majesty that such honours be granted in future. In fact, though in past years many honours were to local party functionaries and to Members of this House, in the past two years most political honours have been related to local authority service.
In future, recommendations in respect of such service—that is local authority service—will be treated in the ordinary way without reference to the political party to which the person recommended belongs; it will be public service which will be recognised, irrespective of party.
I trust that these new arrangements will be welcomed by the House as a desirable and necessary reform of the Honours system.

Mr. Armstrong: Is my right hon. Friend aware that this decision to make further inroads into the patronage system, which has been so over-used by past Administrations—and, indeed, often abused—will give widespread satisfaction, certainly on this side, and throughout the country? But will he look seriously at the social selection written into the present system, where we have awards of M.B.E. and B.E.M. to the lower levels, and other awards and titles to the so-called higher strata?

The Prime Minister: It is our duty to review all aspects of the honours system, and this we shall be doing over a period of time, but I thought it right to bring to an end this system of political honours as we have known it in the past. Very many worthy people of all parties, and no

party, give tremendous public service in local government.
I think that it is utterly wrong, whichever party is in power, that for 13 years practically all the recognition of local authority councillors, aldermen and others was because they belonged to one party. I should think that it would be wrong also if, for the next 13 years, they should all be from another party.

Mr. Thorpe: Is the Prime Minister aware that he has dealt a savage partisan blow at Conservative workers in the field? Is he aware that if 15 years of anaesthetic docility on the benches of this House will no longer be rewarded by a knighthood, he is changing the whole course of politics?

The Prime Minister: No, Sir. I think that the hon. Gentleman is very wrong and, indeed, monstrously unfair to the Conservatives. It is known that whenever there was a Conservative Honours List he rushed into print with a statement very justly attacking the system they were then operating. Surely, there is a fallacy in what he has now said, because he assumes that they will have any source of patronage for the next 10 years, which, of course, they will not.

Mr. Shinwell: My right hon. Friend has made no reference to the hereditary system. Do I understand that in future there will be no recommendation in that context? And what about the position of sons, the heirs of peers, earls, and the like? In the event of the demise of peers, can we be assured that their sons will not be permitted to take their place in the House of Lords?

The Prime Minister: There has not been, since October, 1964, any recommendation for a hereditary peerage or baronetcy, or any other honour carrying with it hereditary characteristics.
On my right hon. Friend's later and wider points, it was said at Question Time the other day that this affects very profoundly the composition of another House. As I have said on a number of occasions, I think that if the need arose we would be more concerned with the question of the powers in another place than with its composition.

Sir G. Nabarro: Can the Prime Minister say why he made no reference to


Privy Councillorships? Is it his intention to continue the proliferation of Privy Councillorships as a sort of political "rooty-gong" to members of his own party who have given little or no service to this House or public service, and simply as a substitution for what my party gave in the form of knighthoods and baronetcies?

The Prime Minister: In answer to that question by one of the more notable proliferees of the 13 years of Conservative rule—not, I think, one of the most docile, certainly—the position is that Privy Councillorships have always been regarded as an honour to Members on more than one side of the House. During the 13 years of Conservative rule it was not unusual for Privy Councillorships to be recommended in respect of those not members of the Government party, and this has continued since. I think that it would be wrong to deal with the Privy Councillorship position, which is well understood in the House, as compared with what I regard as the more unsavoury aspects of the political honours system.

Mr. Emrys Hughes: Can my right hon. Friend say whether his announcement means that no more knighthoods will be given to trade union leaders? Is he aware that if this is so it will give great satisfaction to the miners in my constituency?

The Prime Minister: By eliminating one particular and quite large group from regular Honours Lists, the position now is that the basis for selection will be public service, whether national or local, whether in industry, local government, national government or in any other way.
As regards industrial honours, the judgment as between managers, chairmen, directors, trade union leaders and others will be made on the basis of their public service and not on their political party.

Mr. William Hamilton: Is the Prime Minister aware that many of us on this side of the House will be appalled by the characteristic timidity and conservatism of my right hon. Friend's approach to this and other matters—[HON. MEMBERS: "Oh."]—other related matters? Can he give an assurance that the Civil

Service aspect will be dealt with because, at the moment, all that a top civil servant has to do to get a high honour is to keep his nose clean.

The Prime Minister: There is a lot to be said for keeping noses clean. I was aware that this would not satisfy my hon. Friend in his moves for root and branch reforms, not only of the honours system but other, as he called them, related matters, but in this statement I have set out to deal with one particular important aspect which, I think, will enable the Honours List to be more truly representative in future of all who are carrying out important local government service.
On the question of the Civil Service, as my hon. Friend will know, there have been reductions by our predecessors. I am paying them a tribute about this, which, perhaps, is very rare. Our predecessors who were responsible did, in fact, cut down the number of what were previously regarded as automatic honours in the Civil Service. I think that the results have been seen since then and we have continued it.
As to my conservatism about other matters referred to by my hon. Friend, I hope that he will always regard me as somewhat timid and conservative.

Mr. Speaker: Mr. Pannell.

Mr. C. Pannell: I did not actually rise then, Sir. [Laughter.]

Mr. Speaker: Order. If any hon. or right hon. Member changes his mind, the last thing I would do would be to press him to speak.

Mr. C. Pannell: I did not rise at that stage, because my hon. Friend the Member for West Fife (Mr. William Hamilton) covered a large part of the point I intended to make, but in so far as I have been asked to rise now, may I put it to my right hon. Friend that I thought that on both sides of the House we had considered that political service is probably one of the best forms of voluntary service still known. I hope, therefore, that nobody will be disadvantaged because his or her service has been political service, because political service and public service are very often synonymous. Usually, people make some sacrifice for it. A great many would have rather wished that the


Prime Minister had taken all these badges of rank away from the Civil Service before he attacked the elected element.

The Prime Minister: There is no question of attacking either the elected or the official element in local government. As I have said, something like 90 per cent. of the political honours in the last two years have gone for political and public service to men and women who have a very devoted and dedicated voluntary record in local government. The test in the future in relation to anything in the nature of party recommendations will be that they should be judged for their local government records irrespective of party, and, indeed, on a basis which would enable more recognition than has been the case of devoted work by local government officials as well as elected representatives.

BUSINESS OF THE HOUSE

Mr. Heath: May I ask the Leader of the House to state the business of the House for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Richard Crossman): Yes, Sir, The business for next week will be as follows:

MONDAY, 31ST OCTOBER—Third Reading of the Land Commission Bill, until seven o'clock.

Afterwards, debate on the Opposition Motion on the Conduct of the Home Secretary.

Motion on the Torbay Order.

TUESDAY, 1ST NOVEMBER—Second Reading of the National Coal Board (Additional Powers) Bill and of the Expiring Laws Continuance Bill.

Motion on the Building Control (Cost Limit Exemption) Order.

WEDNESDAY, 2ND NOVEMBER—Remaining stages of the Armed Forces Bill and of the Barbados Independence Bill.

Motions on the Greenwich Hospital and Travers' Foundation Accounts and on the Electricity (Borrowing Powers) Orders.

THURSDAY, 3RD NOVEMBER—Supply [2nd Allotted Day]: Committee, which if agreed to, will be taken formally to allow debate on an Opposition Motion on Agriculture.

FRIDAY, 4TH NOVEMBER—Second Reading of the Education Bill and, if there is time, of the Family Provision Bill [Lords].

MONDAY, 7TH NOVEMBER—The proposed business will be: Second Reading of the Road Safety Bill.

Afterwards, as the House is aware, the Chairman of Ways and Means has put down opposed Private Business.

Motion on the Double Taxation Relief (Taxes on Income) (Switzerland) Order.

Mr. Heath: Is the Leader of the House aware that, as my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) said the other day, we shall want to have the opportunity of discussing any Orders laid under Part IV of the Prices and Incomes Act and discussing them as the first Order of the Day, not late at night or at a time which is inconvenient for the House?
Secondly, is the right hon. Gentleman aware that it has now become extremely urgent that the position in Gibraltar should be cleared up? It is most uncertain as a result of the confusion created by the Secretary of State for the Colonies this week. Will the Leader of the House give an undertaking that the Colonial Secretary will make a full and clear statement on this matter as soon as possible next week?

Mr. Crossman: I will certainly bear in mind the importance which the Opposition attach to that question of Orders under the Prices and Incomes Act. It will be discussed through the usual channels. The Foreign Secretary will be answering a Question on Gibraltar on Monday.

Mr. Heath: These. Orders are of much wider interest than merely to the Opposition. They are of immense interest to a very considerable section of the right hon. Gentleman's party.

Mr. Crossman: I appreciate that and I simply said that I think we had better discuss it. They will be there for some months and we ought to discuss them and form a regular way of dealing with them.

Miss Lestor: Has the attention of my right hon. Friend been drawn to Motion No. 208, standing in my name—
That, in view of the fresh evidence now available, this House urges the Home


Secretary to hold an immediate inquiry into the Hanratty murder case—
signed by more than 40 Members? Can my right hon. Friend say whether he will be giving time to debate this Motion in the near future, or if he has any knowledge that the Home Secretary is likely to make a statement on the matter?

Mr. Crossman: I understand that the latest representations about the case are still under consideration and that my right hon. Friend the Home Secretary will then decide whether an inquiry would be justified.

Sir C. Osborne: As a matter of urgency, will the Leader of the House find time next week to discuss the representations which the T.U.C. leaders made two days ago to the Prime Minister about the 1 million unemployed which they fear there will be after Christmas, and the reply which the Prime Minister has given to the T.U.C.'s leaders? Will he regard this as the most urgent matter facing the the nation?

Mr. Crossman: We had discussions this week, on Monday and Tuesday, closely related to this matter. I do not think that I can give any assurances that next week we can have further discussion.

Mr. Coe: Will my right hon. Friend clarify the Answer he gave me last week on the desirability of an early debate on local government reform? The Answer given in the OFFICIAL REPORT seems to be at variance with what I recollect he said on that occasion.

Mr. Crossman: I did not notice that in the OFFICIAL REPORT. I think that I must have been misheard. What I said was that there was plenty of time for a debate on local government. Since my hon. Friend raised the question last week there have been developments and that the Local Government (Termination of Reviews) Bill is to be presented today. I very much hope that we shall be able to take the Second Reading in the next few weeks. It may well be that the point my hon. Friend has in mind will—subject to your views, Mr. Speaker—be in order on that occasion.

Mr. Webster: When will the Government provide time for a debate on a Motion, which refers to the crass incompetence of the Government in failing to

have an authorised Minister present for a Second Reading of a Bill? This was the Road Traffic Bill Second Reading Committee, if the Leader of the House is not aware of the fact, as appears to be the case. Will he take the opportunity, in his desire for the reform of Parliament, to make sure that in the meantime Parliament does not become simply a rubber stamp for the Executive?

Mr. Crossman: I really can assure the House that no discourtesy to the Committee was intended. I believe apologies were made for the inconvenience caused to hon. Members concerned. I hope that the Committee will be able to proceed normally next week.

Mr. Michael Foot: Referring to the question put down by my hon. Friend the Member for Eton and Slough (Miss Lestor) on the Hanratty case, will my right hon. Friend take into account that if, according to the evidence, it proves correct that there has been a miscarriage of justice, the very gravest implications are involved? Will he also take into account that the Home Secretary, I believe, himself said some years ago that he believed that an inquiry was necessary and urgent?
There should be the earliest possible statement to the House—we hope accepting the proposal for an inquiry—but if the Home Secretary does not find that possible immediately will my right hon. Friend make arrangements for a debate in the House so that representations may be made on this extremely important matter?

Mr. Crossman: I do not want to mislead the House, but I think that the first and most important thing is that all representations should be considered fully by the Home Secretary before he makes up his mind. Directly after that he will make a statement giving a decision on whether he thinks that an inquiry is justified or not. We can look at the question of a debate and consider it then.

Mr. Hastings: The Leader of the House has now had 24 hours to think over what the right hon. Member for Vauxhall (Mr. Strauss) said to him yesterday on the question of Parliamentary reform. Cannot he give us a date for this debate? Does he not now agree that the question of the effective control over


the executive by Parliament is a matter principally for Members of Parliament and not for the Executive.

Mr. Crossman: I have nothing to add to what I said last week, either as to the timing of the debate, which will come soon after the debate on television, or on the issue of how the vote is taken.

Mr. Milne: Will my right hon. Friend consider arranging an early debate on the Report of the Geddes Committee and its implications for the shipbuilding industry?

Mr. Crossman: My right hon. Friend the President of the Board of Trade is proposing to introduce legislation on this matter, and we shall have such a debate on the legislation.

Mr. Sandys: For a number of months hon. Members in different parts of the House have been pressing the Government to make a statement about the results of the exploratory talks between themselves and the Governments of the European Economic Community. Can a full statement on the Government's policy in regard to our joining the Community be made at an early date?

Mr. Crossman: I do not think that there is any prospect of a statement at an early date, but this can be debated, if there is complaint about it, in the two-day debate on foreign affairs which will certainly take place before Christmas.

Mr. Dalyell: In view of my right hon. Friend's answer to me last week, and as hon. Members will now have had time to digest the three important, though brief, reports on science, is there a possibility of an early debate on science policy?

Mr. Crossman: My hon. Friend's digestive capacity for scientific reports is gigantic. I think that we must wait a little. I cannot give him any immediate prospect of a debate.

Mr. Strauss: Has my right hon. Friend studied Motion 215, which is signed by a very large number of Members on this side, about the Government's proposals for procedural reform? If my right hon. Friend cannot make a statement at the moment, or if there is no prospect of a debate, can he say whether he may

shortly be able to make a statement showing that the Government accept the principle that any proposals concerning the arrangements by which Members of Parliament carry out their functions in the House must be acceptable to the majority of the House and must not be imposed by the Government with their Whips.
[That this House views with concern the withdrawal by the Leader of the House of his undertaking to allow a free vote on procedural changes in the House because reforms designed to give the House and its back-bench Members more authority are more likely to be achieved if they are carried by a free vote of the House.]

Mr. Crossman: I believe that the arrangements should be acceptable to the majority of the House. What I said was that I could not give a blanket assurance to my right hon. Friend about the kind of vote to be cast on what might well be a very complex mass and whole number of resolutions.

Mr. Peyton: Is the Leader of the House aware that his right hon. Friend the Minister of Power is tyrannically and contumaciously insisting that the Standing Committee dealing with the Iron and Steel Bill should meet for a third time each week on Thursday afternoons, thus preventing hon. Members of the Committee from taking any part whatever in debates on the Floor of the House on Thursday afternoons?

Mr. Crossman: I think that there are precedents under all Governments for Committees whose activities are prolonged meeting in the afternoon. This is a matter for the Standing Committee and not for me.

Mr. Stratton Mills: Was the Leader of the House present at Question Time today when the Minister of State, Board of Trade, said that the Chancellor of the Exchequer would be making a statement on the serious down-turn in investment in manufacturing industry? Was this a slip of the tongue, or is there a firm commitment by the Government to make a statement?

Mr. Crossman: I think that the hon. Gentleman had better wait and read HANSARD to see exactly what was said in the statement.

Mr. Frank Allaun: How soon may we expect the important Bill providing 4 per cent. subsidies to local authorities and a 2½ per cent. reduction in mortgage interest payments?

Mr. Crossman: The new Housing Bill is now in preparation, and it will not be very long before it will be presented. It will certainly be presented before Christmas.

Mr. Ian Gilmour: Can the right hon. Gentleman add to his reasonably encouraging answer last week on the Government's attitude to the Sexual Offences Bill?

Mr. Crossman: I hope to be able to make a statement next week on precisely what will be done about it.

Mr. Alan Lee Williams: Before we have the promised debate on the Suez operation, will the Leader of the House consult his right hon. Friends to see whether it would be possible for them to produce a White Paper?

Mr. Crossman: I would have thought that we should have a little time for a debate first and consider what to do afterwards.

Sir D. Walker-Smith: Reverting to the question asked by my hon. Friend the Member for Yeovil (Mr. Peyton), is there any precedent for introducing an afternoon sitting of a Standing Committee during the sitting hours of the House at the very outset of the proceedings of the Committee?

Mr. Crossman: I should like notice of that question. I should like to look up the precedents. I certainly could not answer that, question about precedents "off the cuff" this afternoon.

Mr. Alexander W. Lyon: In view of the assurance given by the Prime Minister last week that there will be an early statement on the Government's proposals for settling the Rhodesian issue, will the Leader of the House give an undertaking that the House will be allowed to debate the proposals at an early date after the statement is made?

Mr. Crossman: Yes, Sir. I can give an undertaking. There will have to be a debate on Rhodesia anyway before the

time runs out at the end of the year. Therefore, we shall have an early debate in any case.

Sir G. Nabarro: Is the Leader of the House aware that I sit for an agricultural constituency of 172,000 acres and that I am deprived, by the squalid tactics of the Minister of Power, of the opportunity of being present for the debate next Thursday afternoon, simply because of the Minister of Power's unprecedented action of putting on a third sitting for the Standing Committee on the Iron and Steel Bill at 4 o'clock on Thursday afternoons? I cannot attend the Standing Committee on the Iron and Steel Bill and participate in the debate on agriculture.
Will the Leader of the House undertake to have this matter examined at an early date so that Members may do their duty to their constituents on the Floor of the House?

Mr. Crossman: As regards the hon. Gentleman representing an agricultural constituency, Thursday is an Opposition day and the subject for debate was selected by the Opposition for next Thursday, not by the Government.
I say again that the Committee's sittings is not a matter for me. It is a matter for the Committee how it arranges its business.

Mr. Heath: The Leader of the House is being too modest. The conduct of all Government business is in his hands, including that in Standing Committees. If he were to tell the Minister of Power that he could have an appropriate time to handle his Bill in Committee, the Minister of Power would not have to make demands which interfere with the attendance of Members at normal debates in the House. Why is it necessary so early in the sessional year to put on the pressure in this way? It is quite indefensible.

Mr. Crossman: The Leader of the Opposition knows full well from his experience in government that it is for the Standing Committee to decide how it does its work.

Mr. Shinwell: My right hon. Friend is constitutionally correct that this is a matter for the Standing Committee, but, after all, Members have a right to be in the House: that is where they are


expected to be. To suit the hon. Member for Worcestershire, South (Sir G. Nabarro), could not my right hon. Friend compromise and have the agricultural debate one morning?

Sir G. Nabarro: rose—

Mr. Crossman: rose—

Mr. Speaker: Order.

Sir G. Nabarro: I am sorry, Sir.

Mr. Speaker: The apology is enough.

Mr. Edward M. Taylor: Does the Leader of the House know that it is the experience of members of the Standing Committee not only that their arguments are not answered, but that they are not listened to? Will he at least inquire into the disgraceful tactics of the Minister of Power, who, on Tuesday, introduced a Motion as a result of which we must sit this afternoon in one minute's time?

Mr. Crossman: I will give one assurance. I will make quite sure that my right hon. Friend the Minister of Power reads these exchanges in HANSARD so that he will know the strong feelings which have been represented here. More I cannot do.

Mr. Shinwell: On a point of order. May I have an answer to my question?

Mr. Crossman: There might possibly come a time after Christmas when that possibility becomes a reality, but it is too early to say.

Mr. Winnick: Is the Leader of the House aware that there will be deliberate obstruction on the Iron and Steel Bill?

Mr. Speaker: Order. We are wandering a little from the purpose of business questions.

Mr. Winnick: On a point of order. With all respect to you, Mr. Speaker, you have allowed a question from the opposite side on the Standing Committee on the Iron and Steel Bill.

Mr. Speaker: It is no respect to Mr. Speaker to challenge his Ruling. I must ask the hon. Gentleman to link what he has to say with the business question.

Mr. Winnick: Did the Leader of the House see in the Evening Standard last

night that it was announced by a Tory hon. Member that the
biggest, bloodiest bunch of hooligans
were trying to stop the work on the Steel Bill in Standing Committee? Can my right hon. Friend tell us whether, if the necessity arises, the Guillotine will be used to make sure that the Bill goes through on time?

Mr. Crossman: I did not see this report in the Evening Standard. I should have thought that it would be a matter to report not to me but to Mr. Speaker if something of that sort were said about hon. Members.

Mr. Heath: In reply to the right hon. Member for Easington (Mr. Shinwell), the Leader of the House said that after Christmas it may be possible to take the business of Supply in the mornings. Is he really suggesting that this is what he will propose. Does he realise that if the business of Supply is in the mornings it will come into conflict not only with one Committee, but all the Committees sitting and dealing with legislation? Is this the state to which he proposes to bring the House of Commons?

Mr. Crossman: I am grateful to the Leader of the Opposition. I must say, on reflection, that my desire to please my right hon. Friend went beyond the realms of possibility. I stand corrected.

Mr. Hirst: Is the Leader of the House aware that it is essential that the confused and apparently exceedingly unhappy position of the Colonial Secretary concerning Gibraltar should be cleared up by the responsible Minister, and that it is not enough that that should be dealt with by Question to another Minister, however senior, who cannot be examined by the House in the ordinary way?

Mr. Crossman: I made it clear when I said that on Monday the Foreign Secretary would answer on the question of the Government's policy in Gibraltar. As for the Opposition's desire to censure or attack the Colonial Secretary, it is up to them to do it in their own time.

Mr. Emrys Hughes: Will the Leader of the House give further attention to the very reasonable request from the right hon. Member for Easington (Mr. Shinwell) that farming questions are very


properly discussed in the early morning because the farmers have to get up early?

Mr. Crossman: I think that I can safely say that I will give it attention.

Mr. Heath: I must press the Leader of the House again. He has just announced that, if a Motion of censure is put down on a Minister—including the Colonial Secretary—it must be taken in the Opposition's time. How long has this doctrine been in force? When a Motion of censure is put down on a Minister, it is always taken in the Government's time. He has just announced this for next Monday evening for a particular Minister, the Home Secretary.

Mr. Crossman: I am surprised at the Leader of the Opposition. He will observe that the Motion about the Home Secretary has the full support of the Opposition Front Bench, and the Motion on the Colonial Secretary does not. By convention, there is a considerable difference in the treatment of the two. I was referring to the Motion which hon. Gentlemen have put down.

Mr. Roebuck: Is the Leader of the House aware that the production of corn in South Worcestershire is so tremendous that there is no need for the presence of the hon. Member for Worcestershire, South (Sir G. Nabarro) in agricultural debates?

Mr. Hector Hughes: Will the Leader of the House find time for a debate upon powers and activities of the Board of Trade under the Merchant Shipping Act, 1964, referred to in Question 6 today, to which the Answer was not satisfactory, and which is very important having regard to certain incidents on the high seas recently?

Mr. Crossman: I shall certainly consider my hon. and learned Friend's wishes, but there is no room for it next week.

ABERFAN DISASTER (TRIBUNAL)

The Attorney-General (Sir Elwyn Jones): Mr. Speaker, with permission, I should like to make a statement concerning the Aberfan Tribunal of Inquiry.
The Tribunal having been established with wide terms of reference, it is highly

undesirable that any comments should be made either in the Press or on the radio or on television on matters which it will be the express function of the Tribunal to investigate.
Apart from their manifest un-desirability, such comments may have legal consequences which are, perhaps, not at present appreciated. Just as comments on the subject matter of a pending trial may constitute contempt of court, so, also, the Tribunal would have to consider whether such comments amounted to such an interference with their highly important task as to necessitate the Chairman certifying that it called for an investigation by the High Court as to whether there had been contempt of the Tribunal. The possible consequences call for no elaboration by me.
I should like to add that I am authorised by Lord Justice Edmund Davies, the Chairman of the Tribunal, to say that all who have relevant information will be afforded the fullest opportunity of submitting this to the Tribunal.

Sir J. Hobson: Will the Attorney-General reconsider whether his statement does not go too far and that an attempt should not be made to stifle all comment of every sort by Press and public on this matter, provided that it is reasonable and relevant to the inquiry, because such comment may very well lead to a new line of inquiry by the Tribunal?
Secondly, could the Attorney-General tell us whether he himself will be appearing at the Tribunal, or who will represent the public interest at it? Thirdly, would he agree that it is highly unlikely that any comment, however wide, would have the slightest interference with or effect on the very powerful and robust Chairman of the Tribunal and his fellow members, and that that is the test of what is a contempt or not? While, naturally, we want to give what protection we can to the Tribunal, it is fairly well able to look after itself.

The Attorney-General: Now that the Tribunal has been set up and its quality has received the approval of the House, it is desirable that the issues which it is now charged with investigating should be considered and decided by it. The Tribunal will be anxious to receive any


views, any information and any suggestions relevant to the issues it has to decide, but there is a certain danger in examination of potential witnesses on television and in the Press when the best means of ventilating opinion and passing on information now if we are to get to the most effective result from this inquiry is by communication with the Tribunal itself.
Representation at the Tribunal is a matter which is receiving consideration and an announcement will be made shortly.

Mr. Alexander W. Lyon: Is my right hon. and learned Friend aware that this announcement will be received by many both inside and outside the legal profession with great regret? The whole pattern of events within the law over the past few years has been to limit the area of contempt of court for the obvious reasons which have just been stated by the right hon. and learned Member for Warwick and Leamington (Sir J. Hobson), that where a jury is not involved the kind of comment that might be made in the Press or television is unlikely to sway those who have to make the decision. In an area where the decision will be made by a member of the judiciary and two assessors of outstanding merit the law of contempt should surely not be extended still further.

The Attorney-General: I have said that there are dangers of comment and examination of witnesses and such other procedures interfering with the Tribunal's work, forestalling evidence that witnesses might give and producing results which could make the Tribunal's work more difficult. It is because we are anxious that the Tribunal should be assisted in its work and not impeded that the announcement has been made.

Mr. Hooson: I welcome the Attorney-General's announcement which, I think, was necessary, for it is obvious that, if there is to be examination by television or in newspapers of evidence not properly examined, people's hopes may be wrongly excited or their beliefs wrongly induced. It is very necessary with a Tribunal of this kind to have a

limitation of public discussion while the Tribunal is considering it.
Can the Attorney-General say what consideration has been given to the representation of the parents of the deceased children at the Tribunal, as I understand that legal aid is not available for them?

The Attorney-General: On the second part of the hon. and learned Gentleman's question, my right hon. Friend the Secretary of State for Wales will make an announcement in the very near future and I do not think that the hon. and learned Gentleman will be disappointed with the answer.
I am grateful to him for the first part of his question. I am sure that the radio, television and Press authorities will have a full appreciation of the kind of consideration that the Government have in mind and will respect the approach which I have recommended to them in my statement.

Mr. C. Pannell: I can understand what the Attorney-General has said about radio and television and the heavier organs of the Press, but I hope that he will say a few words now which will not appear to muffle the normal discussion going on in the neighbourhood on the various courses of action which might lead to a satisfactary outcome. I can quite well imagine his statement having the opposite effect to what he wants; it might stifle discussion which would otherwise, perhaps, lead on to a useful inquiry. Although we agree—at least, I do—on the subject of television, radio and the Press, I hope that we shall not be as meticulous as all that.

The Attorney-General: I hope that, so far from stifling discussion, my statement will have the opposite effect by stressing the importance of all relevant information which anyone has to communicate on this grave matter, which affects the safety of many communities in our country, as I know in particular, coming from South Wales. I urge the importance of all information and all suggestions which could possibly be relevant being communicated to the Tribunal, whether this be done by scientific experts or by anyone who thinks that he can shed light upon this tragic event and, in particular, on the avoidance of a recurrence of such a thing in the future.

Sir Knox Cunningham: Does not the right hon. and learned Gentleman consider that ventilation in the Press may be of real and genuine assistance to the Tribunal? It may bring out the sort of information which he wants and may help to prevent another tragedy happening, not only in Wales but elsewhere in the country. Will the Attorney-General bear this in mind? It is an important aspect of the matter that such ventilation would be of help, or might be of help, to the Tribunal itself.

The Attorney-General: I think that the limits of what could be useful will be understood in the light of my statement. As I have said, the most important thing at the moment is that the Tribunal, above all, should be seized of the information. Procedures of the kind outlined by the hon. and learned Gentleman the Member for Montgomery (Mr. Hooson) are not really calculated to produce either a satisfactory conclusion as to the facts or a satisfactory conclusion as to the circumstances which gave rise to the tragedy.

Mr. Gordon Walker: Will not my right hon. and learned Friend draw a distinction between such things as actual questioning on television of possible witnesses, which, clearly, would be wrong, and general enlightened discussion and argument,

including such discussion on television and in the Press, about the broad nature of these events? I think that he was trying to make this distinction, but I am not sure that it came out clearly.

The Attorney-General: I am grateful to my right hon. Friend for that elaboration. The important thing is that there should not be either prejudging of the issues or such interference—if that is not too harsh a word—with witnesses as to embarrass their future position as potential witnesses before the Tribunal.

BILL PRESENTED

LOCAL GOVERNMENT (TERMINATION OF REVIEWS)

Bill to dissolve the Local Government Commission for England and the Local Government Commission for Wales, to provide (with retrospective effect) for the discontinuance of reviews under Part II of the Local Government Act 1958 and to repeal section 30(6) and certain related provisions of the London Government Act 1963, presented by Mr. Anthony Greenwood; supported by Mr. Cledwyn Hughes, Mr. Edward Redhead, and Mr. James MacColl; read the First time; to be read a Second time tomorrow and to be printed. [Bill 120.]

Orders of the Day — LAND COMMISSION BILL

As amended (in the Standing Committee), further considered.

Clause 47.—(REFERENCE OF OBJECTION TO LANDS TRIBUNAL.)

4.15 p.m.

The Minister of Land and Natural Resources (Mr. Frederick Willey): I beg to move Amendment No. 66, in page 47, line 41, to leave out from "levy" to "require" in line 44 and to insert:
then, at any time when the notice of assessment of levy has not been withdrawn or otherwise ceased to have effect and before it has resulted in an operative assessment of levy, either the objector or the Commission may".
It might meet the convenience of the House, Mr. Speaker, if we considered at the same time Amendment No. 69, in page 48, line 20, to leave out subsection (5), and Amendment No. 70, in page 49, line 26, to leave out paragraph (d).

Mr. Speaker: I have no objection, if the Opposition have none.

Mr. Graham Page: Mr. Graham Page (Crosby)
 indicated assent.

Mr. Speaker: So be it.

Mr. Willey: The effect of these Amendments is to allow appeals to the Lands Tribunal, after objection has been made to the assessment, at any time instead of within such times as may be prescribed by rules. This further simplifies the procedure regarding assessment, and I am sure that it will help not only the Commission but, more important, the levy payer.

Mr. Graham Page: I take it that this could be an application either by the Commission or by the person being charged the levy. It is for both of them?

Mr. Willey: Yes.

Amendment agreed to.

Mr. James Allason: I beg to move Amendment No. 67, in page 48, line 7, after "Tribunal" to insert "(a)".

Mr. Speaker: It is suggested that we take at the same time Amendment No. 68, in page 48, line 9, at the end to insert:
and
(b) subject to the provisions of section 70 of this Act, shall not vary such a notice by increasing the principal amount of levy specified in it".

Mr. Allason: As you suggest, Mr. Speaker, it would be convenient to discuss Amendment No. 68 at the same time. It is the substantive Amendment here, Amendment No. 67 being the paving Amendment.
Where there is an objection to the assessment of levy, appeal lies to the Lands Tribunal. These two Amendments are designed to ensure that, in the normal case, the Lands Tribunal should not increase the amount of levy. Yesterday, I had a letter from a constituent who is a guest of Her Majesty at the moment informing me that his appeal against sentence had failed and that, in consequence, he had to serve an extra 67 days. This arises from a provision in our criminal appeal procedure designed to deter appeals against sentence. But we do not want to deter anyone from appealing against sentence to the Lands Tribunal. It seems useful, therefore, to ensure that there shall be no danger, simply on appeal to the Lands Tribunal, of an increase in the amount of levy.
However, there is an exception. It is not possible to make this proposal without providing for an exception. In our normal procedure, we should have had opportunity to discuss that exception here, but, of course, it would involve discussing a new Schedule. This would be very unfashionable in the debates which we are having on this Bill and I regret, therefore, that it seems necessary to ask the House to accept the Amendment without a full explanation. That full explanation would take us into the realms of a new Schedule. I content myself with saying that there is an exception which will be dealt with later.

Mr. Willey: I am both glad and anxious to accept the Amendment. It meets a point which was raised by the Opposition. It was not intended that the Bill should have the result which the hon. Gentleman suggested, and the


Amendment makes quite clear that it cannot happen.

Amendment agreed to.

Further Amendments made: In page 48, line 9, at end insert:
'and
(b) subject to the provisions of section 70 of this Act, shall not vary such a notice by increasing the principal amount of levy specified in it'.—[Mr. Allason.]

In page 48, line 20, leave out subsection (5).—[Mr. Willey.]

Clause 48.—(SETTLING OF OBJECTION BY AGREEMENT.)

Mr. John Farr: I beg to move Amendment No. 198, in page 48, line 25, to leave out from beginning to 'Act' in line 27.
This point was discussed in Committee, all too shortly. It is an important matter, and the Minister was good enough to indicate that he would give it further consideration. He said that there was nothing to prevent the two parties getting together informally as the Bill is framed. But there is nothing in the Bill to indicate to anyone studying it to see what the procedure is that such a thing is permissible.
As we pointed out yesterday, we cannot rely in future on what the right hon. Gentleman believes is the interpretation of any specific Clause. People will be guided by what is actually in the Bill, and, as the Bill stands, it is stated clearly that discussions cannot begin until a counter notice objecting to the notice of assessment of levy has been served under Clause 46. We believe that all this is unnecessary palaver. It is an unnecessary formality because, if this machine is ever going to work, the works must be oiled in some way and it is just this sort of cumbersome and unwieldy procedure which will make it impossible for the Commission ever to get on the move—although whether, if it ever gets on the move, it stays on the rails is another question.
Our intention in moving the Amendment is simply and sincerely to oil the mechanism and help get the parties together informally so that discussions can take place. If it is not accepted, anyone receiving an assessment with which he disagrees or which is in error cannot do the normal, sensible thing—lift the telephone and point out to the Commission

that the acreage is wrong, for example, or the date. He must go through all the cumbersome procedure laid down in Clause 46.
He must formally notify the Land Commission of the various details before his objection can be considered. That must be carried out however simple and straightforward the error may be. He has to serve a counter notice in which he states the grounds of his objection. He has to put in a statement of what he believes the counter assessment should be. To enable him to provide all the necessary information, he will in some cases have to go to considerable expense. He will be unwise if he does not get legal advice and he will surely have to get a valuer's advice. He may well have to draw upon a surveyor's advice. He will be involved in considerable expenditure. With this Amendment, we are genuinely seeking to oil the wheels of this cumbersome machine, and I hope the Minister will be able to accept it.

The Parliamentary Secretary to the Ministry of Land and Natural Resources (Mr. Arthur Skeffington): As the hon. Gentleman has said, we had an interesting discussion on this point in Committee and fears were expressed that it might not be possible for the Land Commission and the levy payer to agree before a counter-notice was served. My right hon. Friend agreed to look at this aspect very carefully. He has done so and, in correspondence with the hon. Member for Crosby (Mr. Graham Page), explaining what studies he has made, he has said that he is satisfied, on reconsideration, that there is nothing to prevent the Land Commission and the levy payer reaching agreement before the counter-notice is served.
The Amendment is therefore redundant. There is no need to provide a statutory procedure to deal with a case which can be settled without any. As we have pointed out from time to time, anything we can do to prevent the Bill being any longer and to make the procedure more flexible is to the good. If, before a counter-notice has been served, the Commission and the levy payer agree to vary the notice, the Commission already has full power to withdraw the notice and serve another. Indeed, a counter-notice may be withdrawn after it has been served, and provision for this is made in


the Bill because it was thought that there should be statutory cover. But such a provision is not necessary in the case of a notice. With these assurances, and following our investigations, I hope that the Opposition will not press the Amendment.

Mr. Graham Page: The Minister and his Parliamentary Secretary are being peculiarly pig-headed over this. The Bill states a certain form of procedure. Only after a counter-notice has been served can an agreement by the Commission and the objector have any force. It is only after that process that subsection (2) comes into operation. It says:
Subject to the following provisions of this section, where an agreement is made as mentioned in the preceding subsection …
it can only be made in accordance with the preceding subsection if a counter-notice of objection to the notice of assessment has been served on the Commission. Subsection (2,b) says that the notice of assessment of levy can be treated
as varied in a particular manner …
and subsection (2,c) says:
if in accordance with the agreement the notice of assessment of levy is to be treated as withdrawn, the notice shall cease to have effect.
In effect, this says that if agreement is reached under Clause 48 it can only be made after a counter notice objecting to the notice of assessment. That is ridiculous. The hon. Gentleman said that anyway there is nothing to prevent the parties agreeing. If that is so, why have the Clause at all? What is the point of it if the parties can agree before or after a counter notice has been served? It would be better, in those circumstances, to remove the Clause altogether. With this Amendment, we are trying to say that we should have a provision that the parties can agree at any time and that the agreement shall have the effect set out in subsection (2). But if they can agree at any time as the position stands, then let us have the Clause out altogether. As it is, anyone reading the Bill will say, "I cannot reach agreement with the Commission until I have served a counter notice". He will therefore trot off to his solicitor, who may say, "I cannot draw this counter notice without advice from a surveyor or valuer", and the fees will go up, whereas he could go straight

to the Commission, discuss the matter across the table and come to an agreement.

4.30 p.m.

Mr. Skeffington: I should prefer not to have a dispute on this matter because there is very little between the two sides of the House. Both sides are trying to do what is best for the levy payer. There is much to be said for leaving this procedure flexible, particularly in view of the assurance I have given and the advice we have received.
The hon. Member for Crosby (Mr. Graham Page) asked why we should have the provision in the Bill. I said that where the assessment could be withdrawn after the counter-notice had been put in this should be given statutory authority, because this is probably the point at which disputes will arise and the matter will go elsewhere. There must be some finality and some stage at which the matter becomes subject to statute.
I suggest that on the other point which the hon. Gentleman mentioned we should be tying down both the Commission and the levy payer in a way which was undesirable.

Amendment negatived.

Clause 49.—(OPERATIVE ASSESSMENT OF LEVY.)

Amendment made: In page 49, line 26, to leave out paragraph (d).—[Mr. Willey.]

Clause 50.—(WHEN LEVY ACCRUES DUE.)

Mr. W. H. K. Baker: I beg to move Amendment No. 243, in page 50, line 27, after 'is' to insert:
'the later of the following dates namely (a)'
Would it be possible to consider at the same time, Mr. Speaker, Amendment No. 199—in page 50, line 28, at the end to insert:
(b) the date on which the person liable to pay the levy receives the consideration or compensation or other sum in which the net development value or part thereof or other amount upon which the levy is chargeable is comprised; and if the consideration or compensation or other sum aforesaid is payable in more than one part the levy shall be apportioned in accordance with regulations to be made by the appropriate Minister or Ministers.

Mr. Speaker: I have no objection.

Mr. Baker: I am obliged.


During the debate on Clause 50 in Standing Committee, several hon. Members, including my hon. Friend the Member for Hornsey (Mr. Rossi), commented on the difficulty of understanding the Clause. Having listened to my hon. Friend's extremely clear exposition on an equally, if not more, abstruse point last night, I feel that the Clause must be extremely complicated if he says that it is. I do not suppose that it is any good at this stage protesting against the complexity of the Bill.
In Committee, the Opposition tried to get clarification of various points. On 28th July the Minister said this:
They"—
that is, the developers—
would like some assurance that in normal circumstances, when the parties are at arm's length, certain consequences would follow, not merely to have to assume that the Commission will act reasonably and sensibly. We will consider whether it is possible to remove any uncertainty in order to help the purchaser and developer."—
I should like to repeat the final sentence:
We will consider whether it is possible to remove any uncertainty in order to help the purchaser and developer.
To the best of my knowledge and belief, the Minister has been unable to do so, otherwise I imagine that the Government would have tabled Amendments to the Clause. However, to be fair to the right hon. Gentleman, he said earlier in the same column of the OFFICIAL REPORT:
We will consider how far we might use the power of issuing general directions to remove the uncertainty…"—[OFFICIAL REPORT, Standing Committee E, 28th July, 1966; c. 647.]
We should like to know whether the Government have found it possible to do this. If not, I think that the Minister is subjecting his own Commission to complexities, and that leaves out of account the interpretation of the Bill by the public and their advisers. I suggest that the Government accept the Amendment in order considerably to help the developer.
As the Bill stands, when a sale is completed and a notice of levy is given, the date of assessment of levy is the date when the notice of levy was given. That is my interpretation of the Bill. To my mind—to a small mind, let me admit—this illustrates the complexities of what we are trying to enact.
The Amendments, in effect, rewrite subsection (2) and make provision for payments of levy to be made when they should sensibly be made. If a man lets his house, he will be charged a levy based on the rent which he obtains for the house over seven years. The levy becomes payable on the date on which the contract is signed. It is, therefore, conceivable that the man letting the house will have to pay the levy and thus completely negative the receipt of a whole year's rent. In other words, he will have to go a whole year without receiving a penny piece in rent from his tenant. If the payments were made to the Commission on an annual basis or some other method, it would be much fairer to the man letting the house. This applies to any rented premises, whether houses, factories or anything else. In Scotland, it equally applies to incomes from feu duties.
We propose that the levy should be payable when the development takes place. If it is not possible to lay down conditions by regulation, then I suggest that the Government should accept the Amendment. A number of my hon. Friends and I think it essential to make the position clear to the public by Statute and not by regulation. In essence, that is what we are requesting—that the payment be made only out of the money received.

Mr. Willey: As the hon. Member for Banff (Mr. Baker) has reminded us, this is a matter which we have discussed. He has raised an important point. Once the system of the levy is established, ways and means will be found to secure the levy. In effect, the hon. Gentleman is saying that the levy should be paid only when the monies have been received.
The difficulty about this is twofold. Administratively it would be almost impossible to provide for it. Second, it would be enormously expensive to create machinery to trace the payments. What we can do is to expect the Commission to use its powers about postponement and payment by instalments.
The hon. Gentleman asked what I envisaged would be the procedure. I expect that the Land Commission will devise rules of practice. These will be known. They will be rules of guidance as to circumstances in which the Commission is likely to resort to these powers.


As I said in Standing Committee, there will be an opportunity, if it were thought necessary——

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

Mr. Willey: As I was saying in reply to the hon. Member for Banff, I can only repeat what I said in Standing Committee. Certainly this would be a matter which we would consider as being appropriate for the use of the power to make directions. One would first, however, as I am sure that the hon. Member would agree, see whether the Commission thought it fit and proper itself to make rules of practice regarding this.

Mr. Graham Page: This is a very important Amendment, certainly from our point of view. We raised the point many times in Committee and on occasions the Minister said that he would consider it. We now have it in the form of an Amendment. It means, briefly, that the levy payer should not be called upon to pay the levy until he receives the money on which the levy is assessed.
My right hon. and learned Friend the Member for Hexham (Mr. Rippon) said yesterday that the Bill was just a matter of throwing the print on the paper. I have acquired a copy of the Bill from the printers' office and I find that they missed with the throw on this very page 50. On that page, the Bill is completely blank. It is a lot better that way. At least, I can understand the blank sheet. We have been quite unable to understand the jibberish in the Bill and it seems that the printers have also failed to understand it and have produced Bills with blank sheets. This copy of mine was one of them, on page 50. For greater accuracy, therefore, I had to obtain another copy to see what our Amendment does.
The date is described in subsection (1) as a date on which the principal amount of the levy accrues due. It accrues due on the date set out in either subsection (2) or subsection (3). As subsection (2) stands, the date would be the date specified in the assessment. By turning back to Clause 45, at the foot of page 46, we find that the notice of assessment has to include

a date (not being earlier than two months from the date of service of the notice) as the date on which the levy is charged.
4.45 p.m.
The levy thus becomes payable after the chargeable act or event, after the chargeable event has been notified to the Commission and after the Commission has, perhaps, asked a few questions about it and has then issued the notice of assessment and specified in it a date not earlier than two months from the date of service of the notice.
Taking into account that period, which, I imagine, might be something like six months, even with expedition, it is hardly likely that a Case A would suffer from the Clause as it stands. Case A is where the vendor has sold the property and normally will have received the sale price or the consideration for the conveyance at the time he makes the conveyance.
Case B is a very different situation. As my hon. Friend the Member for Banff (Mr. Baker) pointed out in moving the Amendment, if property is let under a lease of seven years or more, which comes under Case B, the property is assessed to discover what net development value results from that letting. The assessment is made on that net development value. The net development value may be equal, as my hon. Friend has said, to a year's rent, it might be equal to more or less, but there is no doubt that unless a premium is paid, out of which the levy might be payable, the landlord will be called upon to pay the levy before he has realised the money on which the levy is assessed—that is, the rent of the property.
We would hope by the Amendment to require the Commission to spread the payment of the levy over the rent. It might be that if the amount of money was small, the landlord would wish to discharge it at once. If it was a large amount, it should be spread over the payments.
A transaction under Case C of a development is perhaps the hardest case. Immediately the developer starts a development, such as digging a trench for the foundation of his buildings, he is assessed for levy. It may be years before he realises the proceeds of that development in actual cash. Therefore, he will have to pay out the levy and wait until he finishes his development, and, perhaps, disposes of the property, before he gets


the money on which the levy has been assessed
In Case D—compensation for revocation of planning permission—the amount of levy to become payable is to be assessed when the compensation accrues due to the owner whose planning permission has been revoked. This certainly does not mean, the date on which he is able to put money in his pocket. Those of us who have had experience of compensation cases know only too well that one can agree the figure but that it takes months and months to get the cash out of the statutory undertakers or the local authority. So the levy payer will have to make payment of his levy before he receives the cash on which the levy is assessed.
The same will apply in Case E where easements may have been granted on an annual licence fee, which is a very frequent form of transaction. The assessment will be made on the value of the property in relation to that transaction and levy will have to be paid probably before the receipt of the money on which the levy is assessed.
Case F will relate amongst other things to pipe lines. One does not receive a premium for a pipe line being laid through one's property; it is always done as a matter of licence fee annually or based on other periods, and the same applies as in the case of letting.
The problem arises from the fact that the Government obstinately have refused to treat the levy as any form of tax and apply normal tax laws to it. They have

treated it as a capital demand on the levy payer to be paid by him regardless of the financial circumstances out of which he finds the money. He is assessed for a levy and, no matter what his means may be, no matter whether he has received the money from which the assessment arises, he must pay the levy. All that he can do is, later in the Clause, go on bended knee to the Commission and ask if it will let him pay by instalments. The Commission can then say that it wants security for that postponed payment.

As the Bill stands at the moment, no one can rely on the Commission ever granting that concession for payment by instalments or for postponed payment. From time to time the right hon. Gentleman has said, "Oh, yes. In proper cases, the Commission will allow such payment." At one time, I think that he added, "We might even make regulations about it."

The receipt of the money on which the levy is assessed is a matter which should be in the Bill. There should also be the Clause concerning the Commission granting a concession for payment by instalments. I do not want to wipe out that one, but I do want it to be quite definite in the Bill that the levy is payable out of the money received and that the poor unfortunate victim of the levy will not be mulcted of the money before he has received it out of the transaction which gives rise to the levy.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 144; Noes 176.

Division No. 185.]
AYES
[4.53 p.m.


Alison, Michael (Barkston Ash)
Chichester-Clark, R.
Fletcher-Cooke, Charles


Allason, James (Hemel Hempstead)
Clark, Henry
Foster, Sir John


Astor, John
Clegg, Walter
Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)


Atkins, Humphrey (M't'n &amp; M'd'n)
Cooke, Robert
Gilmour, Ian (Norfolk, C.)


Awdry, Daniel
Cooper-Key, Sir Neill
Glover, Sir Douglas


Baker, W. H. K.
Costain, A. P.
Goodhew, Victor


Batsford, Brian
Craddock, Sir Beresford (Spelthorne)
Gresham Cooke, R.


Bennett, Sir Frederic (Torquay)
Crawley, Aidan
Grieve, Percy


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Crosthwaite-Eyre, Sir Oliver
Griffiths, Eldon (Bury St. Edmunds)


Bessell, Peter
Crouch, David
Grimond, Rt. Hn. J.


Biffen, John
Cunningham, Sir Knox
Hall, John (Wycombe)


Black, Sir Cyril
Dalkeith, Earl of
Harris, Frederic (Croydon, N. W.)


Blaker, Peter
Dance, James
Harris, Reader (Heston)


Body, Richard
Davidson, James (Aberdeenshire, W.)
Harrison, Brian (Maldon)


Bottom, Sir Clive
Dean, Paul (Somerset, N.)
Harvey, Sir Arthur Vere


Boyd-Carpenter, Rt. Hn. John
Dodds-Parker, Douglas
Harvie Anderson, Miss


Bromley-Davenport, Lt.-Col. Sir Walter
Drayson, G. B.
Hastings, Stephen


Bruce-Gardyne, J.
Eden, Sir John
Hawkins, Paul


Buchanan-Smith, Alick (Angus, N &amp; M)
Errington, Sir Eric
Heald, Rt. Hn. Sir Lionel


Bullus, Sir Eric
Eyre, Reginald
Heath, Rt. Hn. Edward


Campbell, Cordon
Farr, John
Higgins, Terence L.


Cary, Sir Robert
Fisher, Nigel
Hill, J. E. B.




Hirst, Geoffrey
Monro, Hector
Shaw, Michael (Sc'b'gh &amp; Whitby)


Hobson, Rt. Hn. Sir John
More, Jasper
Sinclair, Sir George


Holland, Philip
Morgan, Geraint (Denbigh)
Smith, John


Hooson, Emlyn
Morrison, Charles (Devizes)
Steel, David (Roxburgh)


Hordern, Peter
Mott-Radclyffe, Sir Charles
Tapsell, Peter


Hornby, Richard
Murton, Oscar
Taylor, Sir Charles (Eastbourne)


Howell, David (Guildford)
Nabarro, Sir Gerald
Taylor, Edward M. (G'gow, Cathcart)


Hunt, John
Nott, John
Taylor, Frank (Moss Side)


Hutchison, Michael Clark
Onslow, Cranley
Thatcher, Mrs. Margaret


Iremonger, T. L.
Orr-Ewing, Sir Ian
Thorpe, Jeremy


Irvine, Bryant Godman (Rye)
Osborn, John (Hallam)
Turton, Rt. Hn. R. H.


Jenkin, Patrick (Woodford)
Page, Graham (Crosby)
Wainwright, Richard (Colne Valley)


Jennings, J. C. (Burton)
Percival, Ian
Walker, Peter (Worcester)


Joseph, Rt. Hn. Sir Keith
Peyton, John
Walker-Smith, Rt. Hn. Sir Derek


Kirk, Peter
Pink, R. Bonner
Weatherill, Bernard


Knight, Mrs. Jill
Price, David (Eastleigh)
Webster, David


Lloyd, Rt. Hn. Selwyn (Wirral)
Prior, J. M. L.
Whitelaw, William


McAdden, Sir Stephen
Pym, Francis
Wilson, Geoffrey (Truro)


MacArthur, Ian
Rees-Davies, W. R.
Winstanley, Dr. M. P.


Mackenzie, Alasdair (Ross &amp; Crom'ty)
Ridley, Hn. Nicholas
Wolrige-Gordon, Patrick


Maddan, Martin
Rippon, Rt. Hn. Geoffrey
Wood, Rt. Hn. Richard


Mathew, Robert
Roots, William
Woodnutt, Mark


Maude, Angus
Rossi, Hugh (Hornsey)
Worsley, Marcus


Mawby, Ray
Royle, Anthony
Younger, Hn. George


Maxwell-Hyslop, R. J.
Russell, Sir Ronald



Mills, Stratton (Belfast, N.)
Scott, Nicholas
TELLERS FOR THE AYES:


Mitchell, David (Basingstoke)
Sharples, Richard
Mr. R. W. Elliott and Mr. Grant.




NOES


Abse, Leo
Faulds, Andrew
MacPherson, Malcolm


Allen, Scholefield
Fitch, Alan (Wigan)
Mapp, Charles


Anderson, Donald
Fletcher, Raymond (Ilkeston)
Marquand, David


Archer, Peter
Fletcher, Ted (Darlington)
Marsh, Rt. Hn. Richard


Armstrong, Ernest
Foot, Michael (Ebbw Vale)
Mason, Roy


Ashley, Jack
Forrester, John
Mayhew, Christopher


Atkins, Ronald (Preston, N.)
Fowler, Gerry
Mikardo, Ian


Atkinson, Norman (Tottenham)
Fraser, John (Norwood)
Milne, Edward (Blyth)


Bacon, Rt. Hn. Alice
Garrow, Alex
Mitchell, R. C. (S'th'pton, Test)


Beaney, Alan
Ginsburg, David
Molloy, William


Bennett, James (G'gow, Bridgeton)
Gordon Walker, Rt. Hn. P. C.
Morgan, Elystan (Cardiganshire)


Bidwell, Sydney
Gourlay, Harry
Morris, Charles R. (Openshaw)


Binns, John
Gray, Dr. Hugh (Yarmouth)
Murray, Albert


Bishop, E. S.
Gregory, Arnold
Newens, Stan


Blackburn, F.
Griffiths, David (Rother Valley)
Norwood, Christopher


Blenkinsop, Arthur
Hamilton, James (Bothwell)
O'Malley, Brian


Boardman, H.
Hamilton, William (Fife, W.)
Orme, Stanley


Booth, Albert
Hamling, William
Owen, Dr. David (Plymouth, S'tn)


Boston, Terence
Hannan, William
Padley, Walter


Bowden, Rt. Hn. Herbert
Harper, Joseph
Palmer, Arthur


Bray, Dr. Jeremy
Harrison, Walter (Wakefield)
Pannell, Rt. Hn. Charles


Brooks, Edwin
Hazell, Bert
Park, Trevor


Brown, Rt. Hn. George (Belper)
Herbison, Rt. Hn. Margaret
Parker, John (Dagenham)


Brown, Hugh D. (G'gow, Provan)
Hilton, W. S.
Parkyn, Brian (Bedford)


Brown, Bob (N'c'tle-upon-Tyne, W.)
Hooley, Frank
Pavitt, Laurence


Buchan, Norman
Horner, John
Perry, Ernest G. (Battersea, S.)


Buchanan, Richard (G'gow, Sp'burn)
Houghton, Rt. Hn. Douglas
Perry, George H. (Nottingham, S.)


Butler, Mrs. Joyce (Wood Green)
Howarth, Harry (Wellingborough)
Prentice, Rt. Hn. R. E.


Cant, R. B.
Howarth, Robert (Bolton, E.)
Price, William (Rugby)


Carmichael, Neil
Hughes, Emrys (Ayrshire, S.)
Robertson, John (Paisley)


Carter-Jones, Lewis
Hughes, Hector (Aberdeen, N.)
Robinson, Rt. Hn. Kenneth (St. P'c'as)


Chapman, Donald
Hunter, Adam
Robinson, W. 0. J. (Walth'stow, E.)


Coleman, Donald
Jackson, Peter M. (High Peak)
Rodgers, William (Stockton)


Concannon, J. D.
Janner, Sir Barnett
Roebuck, Roy


Corbet, Mrs. Freda
Jeger, George (Goole)
Rogers, George (Kensington, N.)


Dalyell, Tam
Jenkins, Hugh (Putney)
Ross, Rt. Hn. William


Darling, Rt. Hn. George
Johnson, Carol (Lewisham, S.)
Ryan, John


Davies, Dr. Ernest (Stretford)
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Shaw, Arnold (Ilford, S.)


Davies, Harold (Leek)
Jones, J. Idwal (Wrexham)
Shinwell, Rt. Hn. E.


Davies, Robert (Cambridge)
Kenyon, Clifford
Short, Mrs. Renée (W'hampton, N. E.)


Dewar, Donald
Lawson, George
Silkin, Rt. Hn. John (Deptford)


Diamond, Rt. Hn. John
Lee, John (Reading)
Silkin, Hn. S. C. (Dulwich)


Dickens, James
Lestor, Miss Joan
Silverman, Jullus (Aston)


Dobson, Ray
Lipton, Marcus
Silverman, Sydney (Nelson)


Doig, Peter
Loughlin, Charles
Skeffington, Arthur


Driberg, Tom
Luard, Evan
Slater, Joseph


Dunnett, Jack
Lyon, Alexander W. (York)
Small, William


Dunwoody, Dr. John (F'th &amp; C'b'e)
Mabon, Dr. J. Dickson
Spriggs, Leslie


Eadie, Alex
McBride, Neil
Steele, Thomas (Dunbartonsthire, W.)


Edwards, Robert (Bilston)
McCann, John
Strauss, Rt. Hn. G. R.


Edwards, William (Merioneth)
MacColl, James
Summerskill, Hn. Dr. Shirly


Ellis, John
Mackintosh, John P.
Tomney, Frank


Ensor, David
Maclennan, Robert
Tuck, Raphael


Evans, Albert (Islington, S. W.)
McMillan, Tom (Glasgow, C.)
Varley, Eric G.




Wainwright, Edwin (Dearne Valley)
Whitlock, William
Yates, Victor


Walker, Harold (Doncaster)
Willey, Rt. Hn. Frederick
Zilliacus, K.


Wallace, George
Williams, Alan (Swansea, W.)



Watkins, David (Consett)
Williams, Alan Lee (Hornchurch)
TELLERS FOR THE NOES:


Wellbeloved, James
Wilson, Rt. Hn. Harold (Huyton)
Mr. R. W. Brown and


Whitaker, Ben
Wilson, William (Coventry, S.)
Mr. loan L. Evans.

Amendments made: In page 51, line 1 leave out 'notice of assessment of levy' and insert 'assessment'.

No. 72, in page 51 leave out lines 3 to 5 and insert:
'(b) where subsection (3) of this section applies, any instalments payable in respect of any part of that period which precedes the date applicable in accordance with that subsection'.—[Mr. Willey.]

Clause 51.—(INTEREST ON LEVY AND PAYMENTS ON ACCOUNT.)

Amendments made: In page 51, line 19 leave out 'notice of assessment of levy' and insert 'assessment'.

In line 33 leave out 'notice of assessment of levy' and insert 'assessment'.—[Mr. Willey.]

Mr. Willey: I beg to move Amendment No. 75, in page 51, line 38, to leave out from 'prescribed' to the end of line 39 and to insert:
'interest payable by virtue of this section shall be waived or shall be reduced to such extent as may be determined in accordance with the regulations'.
I believe that this Amendment might be acceptable to the Opposition, because it fulfils a promise which I made in the Standing Committee. It gives the Minister power to reduce the amount of interest payable, as well as to waive it.

Mr. Allason: I congratulate the Government on accepting the spirit of the Amendment which I moved in Committee upstairs. They could not accept my wording then, and I must congratulate them on managing to find a variation on it. I moved that the amount of interest payable should be reduced or waived, and now we have an Amendment that it should be waived or reduced. That is the substance of the change which the Government have managed to make. To be fair, they have added:
in accordance with the regulations
but as the subsection starts with the words,
Regulations made for the purposes of this section",
the last few words of the Amendment are redundant. The Government have

shown the greatest ingenuity to avoid accepting the Amendment which I originally moved.

Amendment agreed to.

Clause 52.—(SECURITY FOR LEVY IN CASE OF POSTPONEMENT OR PAYMENT BY INSTALMENTS.)

Mr. Hugh Rossi: I beg to move Amendment No. 201, in page 52, line 34, to leave out from 'security' to the second 'the' in line 36 and to insert:
'as may appear to the Commission reasonably sufficient to ensure'.
The Clause as it stands enables the Commission to require a person charged with the levy to give such security as it may direct,
whether by way of a charge on his interest in the land to which the assessment relates or otherwise…".
It is apparent that if the Commission is to allow a deferment of payment of the levy for any period of time, or is to accept payment of the levy by instalments, it should obtain a security for these payments, particularly in circumstances where the person liable to pay the levy may have sold or otherwise disposed of the land which has given rise to the land being charged.
When the matter was discussed in Committee, my hon. Friends proposed an Amendment to delete the words which we are now proposing to delete and to insert in their place "reasonable security", but the Minister felt himself unable to accept the Amendment because he thought that it would derogate too much from the discretion which the Commission wished to keep to itself.
We argued that there should be a degree of flexibility for the individual. There is no person better than the individual himself to know what his financial resources are, and it may well be more convenient to him to offer to the Commission one kind of security rather than another. He may prefer to offer stocks and shares, or bonds, or an insurance policy, instead of other land, and what the Commission really should be required


to see is that the security offered is adequate to cover the levy which is being deferred, that, and no more.
Nevertheless, accepting the difficulties which the Minister had, or found himself to be in, in Committee, the Amendment which we are now proposing makes it clear that the Commission retains the full discretion about the kind of security which it will accept, but at the same time gives a measure of flexibility which does not exist at the moment, and enables the individual to be able to negotiate with the Commission.
As the Clause stands, the Commission shall direct. It will give an order—"If you want a deferred payment, this is the security which we must have from you". We feel that we ought to be able to enable the individual to come back and say, "It would be more convenient to me if, instead, you would accept this, that, or the other, security. It is adequate, it is reasonable, and it will give you all the protection you want." Ultimately, of course, it will be for the Commission to decide. The Commission always has the last word, because under subsection (3), the Commission has the right to refuse to accept payment by instalment or a deferred payment of the levy.
As long as it has the right to refuse an arrangement of that kind it is able to say to the individual concerned, "We do not really want this kind of security. We do not like it." We have tried to meet the Minister's objections in Committee and leave the fullest possible discretion to the Commission as to the security that it is prepared to accept but, at the same time, by introducing the words contained in the Amendment we make it quite clear that the matter is negotiable, and that the Commission shall act reasonably in this matter and not just give orders. I hope that the Minister will see his way to accept this modest Amendment.

Mr. Skeffington: This is a matter in respect of which we would have like to meet the Opposition, because there is no philosophical dispute about this part of the Clause. The Amendment appears to be largely drafting and, except that it is more imprecise, it would make very little legal difference. It would still enable

the Commission to require such security as it thinks fit, as the normal procedure. When a person is seeking accommodation the grantor is usually the person who lays down the conditions.
Even if the Amendment were accepted it would still be for the Commission to decide what was sufficient to ensure repayment, and it would require the security to be a charge on the person's interest.
We have looked into the matter very carefully, but the advice that we have been given is that the clarity and certainty of the present wording is very much better than that in the Amendment. The discretionary power still remains with the Commission under either form of wording, but because of the imprecision of the wording of the Amendment it might not be so much to the advantage of those seeking accommodation as is the present form of wording. There is nothing to prevent negotiations going on about the security, and I hope that hon. Members opposite will not continue to imagine that this will be an oppressive engine, trying all the time to grind down the faces of the landowners. This is not what it will have in mind. It will be a reasonable body, and the legal significance of the hon. Member's Amendment is no different from the significance of the present wording. Furthermore, it would be more imprecise. Those are two good reasons why the House should not accept the Amendment.

Mr. Graham Page: We want to make it as near a right as possible for the levy payer to be able to pay by instalments when he puts up a good case to the Commission for doing so. We want to remove all the obstacles to this. One of these is the language of the Clause, which says that the Commission shall require such security as it may direct. The Parliamentary Secretary called those precise words, and ours imprecise. I should be glad if they were imprecise. That is what we want. We do not want the Commission to be able to point to the Clause and say, "Here the Commission has to direct." It is the Commission which decides what the security shall be. The words of the Clause are quite precise and determined—
such security as they may direct…".


We would rather have some basis on which the Commission could exercise its discretion in those cases, and the words that we have chosen—
as may appear to the Commission reasonably sufficient to ensure…
express the way in which, in our view, the Commission should exercise its discretion.
5.15 p.m.
This requirement for security will be some sort of obstruction to what I called a concession last time but which I hope is not a concession, namely, permission to pay by instalments. I hope that this will be the normal procedure. The sort of case which may arise very frequently is that where the owner-occupier of a house which has a net development value sells his house, which has a mortgage on it, and is in the process of buying another house out of the proceeds of sale. He has to pay off the mortgage, pay the legal charge and the Stamp Duty on the purchase of the new house, and the legal charges on the sale of his old one. He possibly has to obtain a mortgage on the new house, and also to pay surveyors' fees and removal costs, and probably buy some new furniture, besides doing some decorations.
After all that the ordinary owner-occupier of a suburban house will not have much money left to pay any levies. He will probably find himself well out of pocket because, due to inflation, he has had to buy a house which is more expensive than that which he has sold. That will be so especially in the case of a family man, the size of whose family is increasing, requiring more space.
This is the sort of occasion on which he will find great difficulty in paying any levy if the house which he has sold has a net development value on which a levy is charged. He will go to the Commission and say, "I am sorry. I have not the money to pay the levy. All the money has gone in the expense of paying off the mortgage and buying the new house. I should like to pay by instalments." As the Clause is at present drafted the Commission would make its own decision about such security, and would direct that he should find some security for the payment.
If we can tone down the words and the whole tenor of this part of the Bill

we shall encourage the Commission to grant permission to pay by instalments, first, without worrying about security at all, but if it feels that security is required, not to take more than is absolutely necessary to ensure repayment.

Mr. Skeffington: The hon. Member, as usual, has made a very powerful plea. We have looked at the question very carefully, and it seems to us that the present wording of the Clause gives a great discretion to the Commission. The Clause provides that
The Commission may require… such security… whether by way of a charge on his interest in the land … or otherwise…
Those words are precise. There is no doubt—exactly as is the case in the Amendment—that power rests with the Commission, which is right. The wording in the Clause certainly has the merit of being much more precise, and contains nothing to prevent bargaining between the Commission and the individual.
In substance, the hon. Member has not very much of a case. On the other hand, my right hon. Friend feels that as the Opposition considers that the Amendment provides a better form of wording he can accept it—perhaps with some misgivings as to the way in which his action will be interpreted.

Amendment agreed to.

Clause 53.—(PROCEEDINGS FOR RECOVERY OF LEVY.)

Amendment made: In page 53, line 13, leave out subsection (3).—[Mr. Willey.]

Clause 55.—(FURTHER NOTICE OF ASSESSMENT OF LEVY.)

Amendment made: In page 54, line 16, leave out 'to (6)' and insert 'and (5)'.—[Mr. Willey.]

Mr. Willey: I beg to move Amendment No. 78, in page 54, line 36, to leave out from 'amount' to the end of line 39 and to insert:
'appearing to the Commission to be the amount required to make good the deficiency, after taking into account the principal amount specified in the original notice and in any previous notice served under this section and any relief (whether by way of repayment or otherwise) given or required to be given in respect of the levy in question'.


This Amendment is to put right a defect in the Bill——

Hon. Members: One defect?

Mr. Willey: The first that has been revealed, in the light of our most careful examination. As the Clause stands, it would be impossible to take into account, in serving an additional notice of assessment, any sum repaid under Clause 54. This is where there has been a mistake of fact and it would make it impossible to serve more than one additional notice. In view of the relief which we are giving in regard to Capital Gains Tax and Estate Duty, this might well arise.

Mr. Allason: The Amendment relates to a case in which the Commission might underassess the levy and then try to get some more levy. As the right hon. Gentleman said, they slipped up over this in the original wording. The new wording is satisfactory in its use of the phrase:
appearing to the Commission to be the amount required to make good the deficiency".
This is what is intended, but the Government have rushed in where angels fear to tread.
They have again tried to define precisely and exactly what that deficiency is, saying:
… after taking into account the principal amount specified in the original notice and in any previous notice served under this section and any relief (whether by way of repayment or otherwise) given or required to be given in respect of the levy in question.
Therefore, they have now taken into account, first, the possibility that it is not only the first assessment but subsequent assessments of levy which will all total up to narrow the ultimate deficiency, and, second, the fact that there may be a relief.
This, of course, is excellent news, because yesterday we were told that there might be credits which disappeared into thin air. In this case at least, we learn that there is a relief. Even so, the Minister is tempting fate. There is always the possibility that they have forgotten something and the danger in the Bill is that they have attempted to dot every "i": and every time they dot the "i" they drop the "t".

Amendment agreed to.

Clause 57.—(CHARITIES.)

Mr. Walter Clegg: I beg to move Amendment No. 203, in page 56, to leave out lines 8 to 21 and to insert:
'is held by or in trust for a charity'.

Mr. Deputy Speaker (Sir Eric Fletcher): Perhaps it would be for the convenience of the House to discuss at the same time Amendments Nos. 204, in page 56, line 25, to leave out from 'and' to the end of line 28, and 205, page 56, line 34, to leave out subsections (4) and (5).

Mr. Clegg: The Clause concerns charities, and I should have thought that on this Clause the right hon. Gentleman might have had a little more support from his back benches, if not on the more esoteric Clauses which we have been discussing. However, from the outset, the Minister has shown himself rather more concerned with charities than that shown initially by his right hon. Friend the Chancellor of the Exchequer when he introduced the Selective Employment Tax.
As it now stands, unamended, the Clause relieves certain land held by charities, but not their investment land. That situation was put shortly and with extreme clarity by my hon. Friend the Member for Crosby (Mr. Graham Page) in Committee. He said:
May I try to crystallise the issue? As I understand the right hon. Gentleman, there are four types of land held by 'charity'. The first is functional, the second is recently functional, the third is permanent endowment and the fourth is investment land. The first three are exempt from the levy under this Clause and the fourth is not exempt. We on this side of the Committee wish to exempt the fourth on the grounds that income from that category is exempt from Income Tax and from other tax spheres, and should be exempt from levy."—[OFFICIAL REPORT, Standing Committee E, 28th July, 1966; c. 688.]
These three Amendments are designed to achieve what my hon. Friend said was our objective.
If one accepts the principle that charities are free from Income Tax, this should be followed fully in the levy. Our attitude on this is purely logical. Once one accepts that charities should be in a special category with regard to general taxation, it is logical to follow it through,


even though a levy is a once-for-all payment. The underlying principle of tax relief to charities is that they often provide services which the State would otherwise have to provide. Therefore, the bargain between charities and the State is not entirely onesided. There is a certain and sometimes a considerable amount of self-interest behind the State's actions when it grants exemptions to charities, because it knows that it would often pay more itself if it did not grant those exemptions and thus make the work of charities possible.
I appreciate that some discontent has been expressed in the House recently about the definition of charities, but I understood the Prime Minister to say earlier in the week that there was no early possibility of a change, so we have to work with the definition of charities as we know it. Therefore, the present position being what it is, the right hon. Gentleman could accept these Amendments with no great detriment to the State. Indeed, there may well be positive advantages in his letting their investment land be free of levy.
I believe that the Amendment would provide what the Bill so badly needs, the virtue of simplicity. We have already argued this at great length, but it is an argument which we must never relinquish and I and my hon. Friends will continually return to it. I am convinced that the simple laws are the best laws and that our Amendment would make this Clause much more simple.
One of the Minister's main motives—not an improper one: it can be very honourable—is to stop up avenues of invasion. But at times, he draws his net too tight. In the fishing industry, there are laws against using nets with too fine a mesh, for very good reason—that would bring out small fish which are valueless and which would be much better left in the sea to grow bigger, when they would be worth catching.
I hope that the Minister will consider these Amendments. I know that some of my hon. Friends have particular examples in mind and I therefore do not wish to prolong my arguments.

5.30 p.m.

Mr. Percy Grieve: I should not have thought that in this House it

would have been necessary to have to urge the cardinal principle that charities should be exempt from taxation. My hon. Friend the Member for North Fylde (Mr. Clegg) has stressed the service they render to the State. In these days, when the State makes itself responsible for a great many services that in the past have been given to the community by charities, the scope for charitable operations becomes smaller, but one cannot go to a single constituency without finding example after example of crying needs that are still not met by the State. This is no criticism of the State, but praise of the endeavour of charitable foundations that have been set up by many generations of our forbears.
It is a great tribute to their work. Were those foundations not there today to do that charitable work of providing services for the sick and the needy, for those in need of education, and so on, the service would have to be rendered by the State. Therefore, from time immemorial it has been a principle of Government to exonerate and exempt charities from taxation. It is a matter for grave reflection that it is under this Government that, for the first time, we have had to meet and combat two separate attempts in one year to tax charities.
When it was decided by the Government to impose the Selective Employment Tax on charities, we on this side rose as one man to point out that this was a precedent dangerous and contrary to the public weal. Our protests were at first not listened to or heeded by the other side, and it was said that the tax would nevertheless be imposed on charities. There was an outcry from one end of the country to the other. Better late than never, the Government resiled from their first intention and announced that the Selective Employment Tax would not be imposed on charities; that is to say, they would get back what they had to let go.
In this Bill and in this Clause we have another attempt to impose a tax on charities. I hope that in this case, as in the case of the Selective Employment Tax, the Government will be persuaded of the grave damage which will be done to free, voluntary and charitable services


throughout the country if the Government persist in this attempt. I beg the Minister to give serious and urgent consideration to these Amendments—which have the great merit of simplicity—and announce to the House that he will accept them.

Mr. John Smith: I have done a good deal of financial work for charities, and have also had a good deal to do with property development in this country and abroad—and on behalf, more particularly, of charities. This Clause seeks to manufacture a distinction between two different sorts of money and two different uses to which property can be put. Both these distinctions are old-fashioned, complicated and artificial, and the Bill would be improved—if one can talk about improving it—if they were left out.
The first distinction is between funds which are part of a charity's permanent endowment and funds which are not. The modern trend for new charities is not to have a permanent endowment at all. The first reason for this is that, when managing a gross fund such as a pension fund or a charitable fund, and particularly a fund containing property—and the tendency is for gross funds to invest more in property, which is a very suitable investment for such funds, as it is a long-term investment—it is meaningless to divide expenditure between capital and income. Such a fund is just a heap of money that either grows or shrinks, and whether payments out of it come from capital or from income is quite irrelevant.
Many charities do not even know whether they have a permanent endowment or not. That is recognised in the Bill, towards the bottom of this very page, where we read:
… a charity shall be taken to have a permanent endowment unless all property held for the purposes of the charity…
and so on. It is clear that this difficulty is already recognised.
The second reason why many new charities do not make this distinction and do not have a permanent endowment is the pace of change. Such is the pace of change and the rate of increase of the patronising activities of the State that it

is often quite unrealistic to endow any particular purpose permanently.
For years I looked after the money of the Irish Distressed Ladies' Fund. As the House is aware, ladies do get distressed—even today, and even in Ireland. But these ladies had to be distressed in a particular way with the details of which I will not bore the House, except to say that this particular way became so increasingly rare that we could not get rid of our income and then to make matters worse, we were left a lot more money. Many old charities have found their funds tied to purposes that have vanished, and many new charities have learned the lesson and do not insist on the endowment fund being permanent. The distinction is meaningless, and if this Clause is not amended there will be a return to this old-fashioned practice, which is tiresome for everyone and, I believe, damaging for charities.
The other distinction the Clause seeks to draw is between property which is "used for the purposes of the charity" and property which is not. What is the point of this distinction? The land occupied by the almshouse and the land developed and let—the income from which supports the almshouse—both benefit the alms people. Further, as everywhere in this Bill, there will be confusion. What does
… used… for the purposes of the charity…
mean?
I take an example from the field of preservation; that is, the field of charities that are part educational and part recreational. Very often, a building of national importance can only be preserved if its use is changed and considerable development of it is carried out. A large house may have to be altered into a number of flats. I can think of a building near Hereford which could be preserved only by letting it on a long lease to an insurance company for a completely different purpose.
It was owned by a special charity of its own which had no power to borrow and no other capital and could not have paid development levy. I am a trustee of a charity which is in an unusual position in that its principal asset is a leasehold factory which is constantly being developed, to the great benefit of the objects of the charity, but which


could not be developed if it were necessary to pay development levy since it has no funds or capital from which to pay it. That introduces a further element about this Clause. It is not only damaging to charity but to development. Many desirable developments will simply not take place unless this Clause is amended in this simple way.
It is difficult to understand why the Government want to have this provision. The question of evasion has been mentioned, but evasion does not enter into charity. There are many ways of making money—and I see a good many in the Bill, as I believe will shortly be discovered—but one cannot make money by giving it away. I am sure that the Government do not want to give the impression of being against charity. The Selective Employment Tax has been mentioned. We could certainly get many accountants and lawyers down the mine or working in the export trade or where-ever the Selective Employment Tax is supposed to direct them if we could do without this Bill, or could simplify it.
The Government may not be against charity, but it is an impression which is all to easy for them to create. They may feel that if charitable work is worth doing it should be done at the taxpayers' expense, not by volunteers, but by servants paid and controlled by the State. I sometimes detect the idea at Question Time that "charity" is an over-used word, like "peace" and "freedom", and is now meaningless, as it has been worn smooth by too many lips and tongues. Indeed, the whole Bill is built on an anti-charitable basis. Let us face it. It is not founded on any particular national interest, but on envy which is the enemy of all charity.
The wish to help charity with money or work, shillings or muscles, is enormously widespread. It is very unwise for any Government to tinker with it. It is widespread for excellent reasons. One can work in that field without any taint of selfishness, which is a good socialist reason for working. One can, or could, until now, work in this field untrammelled by the fetters of taxation. Paying taxes is painful, but the waste of human spirit, of highly intelligent manpower in trying to comprehend it, in arguing about it, is far worse, and worse for the country.
I have to do an enormous amount of sterile work on that in the morning, and often sterile work here in the afternoon. When we have finished our work at night—though not at 4 a.m., as last night—I go home and as a complete change I often do an hour or so's work on the finances of a charity. There, all one's work is constructive. One can achieve a great deal; and one can realise for a moment what we have all lost. One can see why our predecessors were able to build up our economy in the world: how they made sterling as safe as the Rock of Gibraltar; because they could concentrate on their job and did not have the job turned by successive Bills like this into a three-legged, egg and spoon race, run in sacks.
The Bill deals a severe blow at the development of this country. Who will wade through all its provisions if he can do something else? If the supply of coffee were to be regulated by a Bill of 97 Clauses, 13 Schedules and 80 pages of Amendments, there would be no coffee because every coffee merchant would turn his hand to something else. The same will happen over development in this country.
I mentioned at the beginning of my speech, now, I am afraid, rather long-distant, that I have had a good deal to do with development in this country, and in Australia. I can assure the House from my own reactions, which cannot be very different from those of others in the same position—I am not so much concerned about making money as with getting the country arranged in an orderly manner, getting developments accomplished and getting the country forward—that, after the Bill becomes law I shall be more inclined, like the coffee merchant, to concentrate on Australia.
5.45 p.m.
This Amendment means very little to the Government in terms of money. It would be interesting to know whether an estimate has been made of just how much it would mean. But it means a great deal to a great many voters who, through innumerable charities work unselfishly for their country, even if they do not work for the State. I cannot believe that the Government means to alienate them just for the 30 pieces of silver involved in this Clause. I urge the Government to accept the Amendment.
Notice taken that 40 Members were not present;
House counted, and 40 Members being present—

Mrs. Jill Knight: Sometimes I feel, much to my chagrin and sadness, that it is necessary to spell out in very elementary terms to the Government precisely what they are doing in their Bills. I think sometimes their heads are so full of the language they have fathered that they do not seem to understand precisely what will be the result of the action of a Bill. For that reason I wish, in supporting my hon. Friend the Member for North Fylde (Mr. Clegg) on this Amendment, to spell out a particular example of what the Bill will mean if it is not amended as suggested.
We were fascinated to hear about the distressed Irish ladies befriended by my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith), but detail here is essential. I wish to tell the Government and the House of an example of how, if this provision is not amended, very severe and direct trouble could be caused to at least one charity of which I have a great deal of knowledge. It is a club for children which was founded some time ago. They are not children of wealthy people but live in a particularly rough and tough area of a certain town in the Midlands. They have had this club now for 40 or 50 years. It is a charity which does a very fine job indeed.
These youngsters, teen-agers, are kept off the streets and from all sorts of nefarious pursuits because in the club there is provision for table tennis, cooking facilities for the girls, canoe-building facilities, and that sort of thing. All these things are put there by people who care sufficiently for these children to raise money in various ways for the charity. It is true that sometimes money is forthcoming from the local education committee, but that is a little like getting blood out of a stone and there is not much money obtained in that way.
In the main, the club is financed, as are thousands of similar clubs, by the efforts of those on the management board, who even run jumble sales and coffee mornings to get money. Occasionally a friend of the club dies and leaves it a house or

other property. Because this has hap-pended in the past, whenever a hole in the roof needed repairing we always knew that we could turn for money to the proceeds of the investment land which had been left to us.
If the Amendment is not carried, as I understand the Bill—it is a feat to understand any part of the Bill—such land could well be taken without the good will of the club, merely being purchased by a compulsory purchase order, or it could be sold in a more straightforward and open way freely by the club, and then, up to six years afterwards, a bill could be rendered to the charity for the betterment levy or, as it used to be called in those long ago days of post-1945, the development charge. Whether it is called a development charge or a betterment levy, the Bill will still come in.
I am willing to admit that I may have misunderstood the position. It is very easy to do that with this Bill. I should be surprised if hon. Members opposite have much more grasp of the Bill than I have. As I understand it, this charity could have to foot a bill some years after the land had changed hands. I wonder if the Government realise what a heavy blow this could be to this charity.
There are many other charities having land which is a great help to them in times of need. They are not all rich. There are schools amongst them. The grammar school at Northampton where I live has land which is investment land and which is of great help to the school. To many charities—schools and others—the benefit is solid and real. Unless the Amendment is carried, this benefit will cease. I beg the Government to accept the Amendment.

Mr. Geoffrey Rippon: I am very grateful to my hon. Friends who have drawn the Minister's attention to the strength of feeling which exists on this matter. A number of my hon. Friends will wish to add to what has already been said. I intervene at this stage only to say how much we deplore, not merely the lack of attendance of the party opposite on a matter of this kind, which affects every one of their constituents in one way or another, but also the fact that neither a representative of the Treasury nor a Law Officer is present.
As I think that the debate will continue for some time, unless the Minister is minded to accept the Amendment now, in the light of the very persuasive arguments which have been advanced, I ask him to send one of the two people who are here to support him to fetch either the Chancellor of the Exchequer or a Law Officer to explain to the House why the Government have decided, quite contrary to all precedents, to tax charities. On a matter of this kind we are entitled to have the view of the Chancellor or of a Law Officer.
In some ways we are desperately sorry for the two Ministers on whose shoulders fall the responsibility of trying to explain the inexplicable. However, sorry as we are for them, we must ask them to do their duty and send for those of their colleagues who have to answer to the House and to the country on these matters.

Mr. A. P. Costain: When the Amendment was being moved there was not a stir on this side of the House, because we expected that the Minister would immediately accept it. We understand why the Minister is not supported by any back benchers on his own side. They are so ashamed of their Government's action in imposing this further taxation on charities that they are not brave enough to attend. I congratulate the hon. Member for Bethnal Green (Mr. Hilton), who has just entered the Chamber.
I want to deploy an argument not dissimilar to that which I advanced yesterday about the owner-occupier. Unfortunately the Minister in replying yesterday made no reference to my speech. I ask him to be gracious enough today at least to say either that he agrees or that he disagrees with me on this point.
For a number of years I was treasurer of one of the largest charities in this country a charity with responsibility for thousands of children. The charity was almost 100 years old. It had a number of old properties. Whilst I held that office one of my pleasures was to encourage our local branches to modernise our homes. We could do this because we were able in some areas, where we had large areas of land and farms, to sell off our farms to build modern small houses for children. In earlier days a children's home was considered to be much more of

an institution. It is now considered right that children should have small family communities. The crime which we committed and the crime which the Government want to tax was to turn those old houses into small dwelling for children. This is the action which in one way or another the Government want to tax. It is an outrage.
There are provisions in the Bill which will allow a charity to make certain developments of its own. I hope that the Minister will try to clear up the position. As I read the Bill, with all the perversities and difficulties involved in understanding it, it is clear that charities of this type which sell off development land to raise funds and do the right thing for those for whom they are responsible will be taxed.
Is it not deplorable that the Labour Government, who claim to have the interests of the under-privileged at heart, should select once again a way of taxing charities? The appeal made by my right hon. and learned Friend the Member for Hexham (Mr. Rippon) that a Treasury Minister should be here should be accepted.
I am delighted that the Minister of Social Security has just entered the Chamber. I am only sorry that she did not hear my plea on a subject which I know is dear to her heart. The Minister kindly accepted the previous Amendment, which was not of such great consequence as this one is. This is a series of Amendments which mean a great deal to charities. Can we not shame the Minister into accepting these Amendments? Can we not shame the rest of his party into coming here and listening to these debates, instead of staying out of the Chamber and then, when the Division bells ring, walking into the Lobby regardless of what they are voting for?

Mr. Farr: I strongly support the plea made by my right hon. and learned Friend the Member for Hexham (Mr. Rippon), especially in regard to the presence of a Law Officer. Yesterday we on this side made a sustained request that the Attorney-General should be sent for. There was a general consensus, not only on this side but also amongst back benchers opposite, that the parts of the Bill we were then discussing were totally indefensible. Once again, this time for


a different reason, we ask that a Law Officer be sent for, so that at least the attendance on the benches opposite will increase by some 33⅓ per cent. with his advent.
6.0 p.m.
I endorse in a small way the very knowledgeable views put by experts from my side of the House tonight. My hon. Friend the Member for Cities of London and Westminster (Mr. John Smith) is obviously an expert on this subject. He has given the expert's viewpoint, saying in his modest way that it is a privilege to carry out work for charities, and he tried to point out to the Minister the disincentive for people to work as he is working if the Clause's provisions are put into effect. There was also an effective speech by my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight), who gave, to the fascination of the House, several personal examples with which he had been concerned. My hon. Friend the Member for Folkestone and Hythe (Mr. Costain) gave an interesting and detailed account of his experience in running a very large group of charities.
I should like to complete the picture not by referring to a large group of charities but by telling from personal experience of the effect that the Clause will have, if enacted, on a small boys' club in a mining town in the East Midlands. This club almost exclusively looks after the sons of miners, boys aged from about 12 to 17 who are at a loose end in the evenings or at the weekends, and who might well otherwise be on the streets or getting into mischief.
It provides carpentry classes, ping-pong, boxing lessons and various courses of instruction to try to keep the kids together. A football team is run at the weekends in the winter and a cricket eleven in the summer. I hesitate to think that any hon. Member on either side of the House would believe that such an endeavour should be taxed in any way.
The club is in a very ancient ramshackle building. An acre or two of adjoining land and the building itself were given for the use of the club through the generosity of earlier citizens of the town many years ago. It is now absolutely essential for the boys to be re-accommodated, and a building fund

which was launched for that purpose brought in quite a lot of money. The club aims to use some of the adjoining land to build a new club and to sell a few hundred square yards of the rest for development. It would then have the wherewithal to erect a suitable new building to carry on its worthy work. Unless my hon. Friend's Amendments are accepted, the Bill will subject this very worthy endeavour to the new betterment levy. No hon. Member who bothered to turn up to listen today could possibly vote for such a Measure.
Those many people who a good number of years ago endowed charities with land foresaw in their generosity and wisdom that land was probably one of the best hedges and safeguards against inflation. They would turn in their graves today if they knew that at the same time they should have had the foresight to hedge against deliberate Government taxation.

Mr. Rossi: The real obstacle to accepting the Amendments is not lack of merit in the argument for the charities. Having listened for a good part of this afternoon, I must say that that argument is completely unanswerable. We have had to drag hon. Members opposite in by the scruff of the neck throughout the afternoon to try to get the benches opposite filled. I feel sure that if the proceedings were televised we should not have this disgraceful display for the country at large on this Measure.
Right hon. and hon. Members opposite stumped round their constituencies during the General Election campaign proclaiming the Land Commission as some miracle, some cure, some panacea for all the woes of the country. Yet it is evident from yesterday's debate and from their absence today that right hon. and hon. Members opposite do not begin to understand what they have been proclaiming, and now care even less about it. When those benches opposite are filled we have an almost paranoiac obsession against charities. There is something about charities that seems to unseat the reason of right hon. and hon. Members opposite completely. We see this repeatedly at Question Time with the snide questions directed against charities, and we saw it during the debate on the Selective Employment Tax. As was rightly pointed out earlier, it was


only by the greatest pressure from this side of the House that we eventually got the Government to agree to give some concession to charity.
During the Committee stages of this very Bill, when we were discussing the definition of charity because we were trying to widen the definition's scope, the Minister was in the greatest difficulty with his back benchers, who told him not to listen to our arguments and said that he should not give way in favour of charities because they did not like them. These arguments are recorded in the Committee reports.
It is clear that the Labour Party has a deep-rooted antipathy towards the whole concept of charity. It is not really surprising, when one examines their mental outlook and philosophy, because they believe in ultimate State control of every form of life and activity in this country. Charities represent the voluntary efforts of individuals who will not bow their heads in allegiance to the local Labour Party bosses, but carry on their public works independently in their own ways. Of course, the Labour Party does not like this, and one sees this attitude in all levels of Government.
In the short time that I have been in the House I have seen it operating repeatedly here in the ways which I have just described. I have also seen it persistently at local government level-effort after effort by local Labour parties to control organisations, and when they cannot control them they try to cripple them by depriving them of local authority monies which should be devoted to these purposes.
I anticipate the Minister's reply, but I shall be very surprised if he accepts the Amendment. He will reject it, not for the fair reasons which we ought to hear from him, as we have done earlier, but from the basic motives which I have tried to outline. Charities are anathema to members of the Labour Party.

Mr. Willey: I assure the hon. Member for Hornsey (Mr. Rossi) that he is completely wrong. The House knows of my personal association with charities. I am not allergic to charities. On the contrary. I have always spoken up for voluntary associations. In my own constituency,

the local authority has given considerable assistance, and successful assistance, to voluntary organisations. It is my belief—I hope that the right hon. and learned Member for Hexham (Mr. Rippon) agrees with me thus far—that a good deal ought to be done in the Welfare State through the association of public and voluntary bodies. Having said that, I must emphasise that, if a charity carries out any development for charitable purposes, there is no question of the levy arising. [An HON. MEMBER: "We have not said so."] I am not saying that anyone has said that, but it might have been inferred from some of the observations made about the difficulties of charities that that was so.
I come now to the problem which has been debated on the Amendment. The analogy the whole time has been with taxation, where personal circumstances are relevant. The levy is not taxation.

Mr. Rippon: Can the right hon. Gentleman say when the Law Officer will be coming?

Mr. Willey: No, I cannot say when the Law Officer will come. I have no reason to believe that he is coming. I am speaking for the Government and giving the Government's view.
The levy recognises that, if there is betterment, if there is a development value, this value is shared with the community. That is the purpose of the levy, and all the argument about the levy has been on the question of betterment. We are here dealing not with the particular charity but with the particular land.

Mr. Grieve: Will the Minister explain the difference in real terms between giving one's money for the community by way of taxation, when it is shared for the benefit of the community, and giving it by a levy which is not so described as taxation for the benefit of the community?

Mr. Willey: If the hon. and learned Gentleman had shared our discussions in Standing Committee, he would have appreciated the point. Levy attaches to land. What one is concerned with here is the scale of profit made on land.
We discussed this question with the charities. The precedent was that functional land should be exempt, as the Committee knows, and I accepted it. There


are technical reasons for it. I went beyond that and struck a compromise. I may be criticised on groudns of logic, but I went beyond that to include permanent endowment land. I regard that as a fair compromise, and I ask the House to rest up on it.

Mr. Graham Page: This is most unsatisfactory. The Minister has not grasped the arguments which we have put. May I, without tedious repetition, direct his attention to what the Clause does if it remains as it is and what the Amendment would do to alleviate the hardship of charities? Let the House be in no doubt about it. The Government are trying to tax—I say that deliberately—the assets of charities, to tax anything which is not part of the permanent funds of the charity, and even if it is part of the permanent funds but has been used for one year for non-charitable purposes.
6.15 p.m.
A non-charitable purpose arises when the land is used for something other than the charity and the charity earns income from it. The income, of course, is put to charitable purposes and this is what so many charities do. They earn an income by letting out their land for purposes which are not charitable at all. It is an investment. The land cannot be said to be in use for the purposes of the charity or for charitable purposes.
The Amendment would extend the relief which the Clause gives to the functional property of the charity to the permanent funds in all cases, whether they have been out of charitable use for a period of one year or not, and it would extend the relief to investment funds. I am amazed at my own art in summarising—I did not know that I could do it so well—and I hope that I may be allowed to quote something I said in the Standing Committee. I may be accused of being long-winded at times, but I think that my summary of the matter in Committee put the point in a few expressive words. I said:
May I try to crystallise the issue? As I understand the right hon. Gentleman, there are four types of land held by 'charity'. The first is functional, the second is recently functional, the third is permanent endowment and the fourth is investment land. The first three are exempt from the levy under this Clause and the fourth is not exempt. We on this side of the Committee wish to exempt the fourth on the ground that income from that

category is exempt from Income Tax … and the land should be exempt from levy."—[OFFICIAL REPORT, Standing Committee E, 28th July, 1966; c. 688.]
That clearly sums up the position. But, although I stated those four divisions of charitable land, the divisions are entirely fictitious. All are held for the benefit of the charity, whether they be used to house the distressed ladies of Ireland or whether they be used to house Marks and Spencer, Woolworth or some other commercial undertaking. The charity is earning income from property and putting the income to charitable purposes, and there is no reason in logic why the investment land should be treated differently from the permanent endowment. It is not so treated for tax purposes. If we had succeeded in securing the assistance of someone from the Treasury, as my right hon. and learned Friend the Member for Hexham (Mr. Rippon) asked, the representative of the Treasury would have agreed that there is no distinction between this levy and a tax and there ought to be no distinction in the Bill.
The law relating to charities is difficult. Usually, when we have to deal with charity matters in the House, we have the assistance of the Attorney-General. Just after my right hon. and learned Friend asked for the presence of a Law Officer, the Parliamentary Secretary left the Chamber. I thought that he had gone to fetch the Attorney-General, but the only person who turned up in his place was the Under-Secretary of State for Scotland. There are charities in Scotland, too. Exactly the same principles will apply—I say this with hesitation, but I think I am right—because the Clause applies to Scotland. I see no exception here, but, unless one turns to the jungle of the Interpretation Clause, one cannot be quite certain which provision applies to Scotland and which does not.
We did have, and hoped that we should continue to have, the presence of the Minister who really ought to know about charities—the right hon. Lady the Minister of Social Security. But immediately someone whispered in her ear that we were talking about charities she shot out of the door like a rocket. The right hon. Gentleman could have sent for the Chancellor of the Exchequer, whose advisers know all about charities and taxation, for the subject crops up


time and again in proceedings on Finance Bills. The right hon. Gentleman could have obtained the Chancellor's advice, and I am sure that this would have been to concede what we ask.
One of the difficulties we have suffered throughout the Bill, particularly in dealing with Clauses and Amendments of this kind, is that we are talking about public revenue, for whether we call the levy a tax or a levy, it is money to be collected from individual citizens for a public purpose. That is not the job of the right hon. Gentleman. He is Minister of Land and Natural Resources. He is not a Treasury Minister.
No doubt, the right hon. Gentleman has received directions that so much levy is to be collected for the purposes of the Exchequer—indirectly, because the Commission is to get a round sum from the Treasury and it must account to the Treasury for the money. Whereas the Exchequer has relieved charities of Income Tax on their income from investment land, it is to collect, via the Commission, a levy on that land by means of this Bill.
We will keep on talking, if the right hon. Gentleman wishes, until he has found where the Attorney-General and the Chancellor of the Exchequer are. I am sure that we should benefit by having their presence on this Clause. The right hon. Gentleman has had to shoulder the burden of the Bill all the way through. He has shown the greatest courtesy to the Standing Committee and to the House but the Government of which he is a Member have shown the greatest discourtesy throughout. Apart from starving him of staff to draw up Amendments in time to get them before the House, the Government have given no thought to the sort of Ministers who could help us on Amendments of this kind. Even the Leader of the House has not looked in on the Bill to see how we are getting on. He does not know what a mess the Bill is and what a struggle the Minister and the Parliamentary Secretary are having. That is typical of the Government.

Today we have been given real examples of hardship which will fall upon ordinary charities by those who know and can see how the Bill will work in practice. We have been told that it will work disastrously for the small charities as well as the big ones. This provision, my right hon. and learned Friend has said, is without precedent in taxation law. But the right hon. Gentleman tells us that it is not taxation but a levy. Are the public going to see the difference between taxation—Capital Gains Tax—and this levy? I shall try to show how the two are related because in the one case a charity is relieved and in the other it is going to be chargeable.

Suppose a charity disposes of its investment land. It bought it for £5,000 and sells it for £7,000 after several years. Someone has to decide how that £2,000 difference is split up for purposes of taxation and levy. Part of it will be an increase in the current use value. If the charity were an individual, it would be charged capital gains tax on that, perhaps £500 out of £2,000 assessed as an increase in current use value. The rest of it may be assessed as net development value, on which the levy is assessed. Is there really a genuine distinction in that division of the gain made out of the sale of the property? To say that one is taxation and the other is not is merely a quibble. It is as fictitious a division as that between the four types of property I have described—the three types exempt from the levy and the fourth, the investment land, which suffers it.

This is an important Clause and we have moved an important Amendment to it which goes to the root of the Bill and the way in which the Government deal with the taxation and levying of people. I hope that the Minister will think again about it and at least save himself the ignominy of taxing charities.

Question put, That the words proposed to be left out stand part of the Bill:—

The House divided: Ayes 177, Noes 131.

Division No. 186.]
AYES
[6.26 p.m.


Abse, Leo
Atkins, Ronald (Preston, N.)
Bennett, James (G'gow, Bridgeton)


Allen, Scholefield
Atkinson, Norman (Tottenham)
Bidwell, Sydney


Anderson, Donald
Bacon, Rt. Hn. Alice
Bishop, E. S.


Archer, Peter
Bagier, Gordon A. T.
Blackburn, F.


Ashley, Jack
Beaney, Alan
Blenkinsop, Arthur




Boardman, H.
Gray, Dr. Hugh (Yarmouth)
Owen, Dr. David (Plymouth, S'tn)


Booth, Albert
Gregory, Arnold
Padley, Walter


Boston, Terence
Griffths, David (Rother Valley)
Palmer, Arthur


Bowden, Rt. Hn. Herbert
Hamilton, William (Fife, W.)
Park, Trevor


Bray, Dr. Jeremy
Hamling, William
Parker, John (Dagenham)


Brooks, Edwin
Hannan, William
Parkyn, Brian (Bedford)


Brown, Rt. Hn. George (Belper)
Harper, Joseph
Perry, Ernest G. (Battersea, S.)


Brown, Hugh D. (G'gow, Provan)
Harrison, Walter (Wakefield)
Perry, George H. (Nottingham, S.)


Brown, Bob (N'c'tle-upon-Tyne, W)
Hattersley, Roy
Prentice, Rt. Hn. R. E.


Brown, R. W. (Shoreditch &amp; F'bury)
Hazell, Bert
Price, William (Rugby)


Buchan, Norman
Herbison, Rt. Hn. Margaret
Reynolds, G. W.


Buchanan, Richard (G'gow, Sp'burn)
Hilton, W. S.
Robertson, John (Paisley)


Butler, Herbert (Hackney, C.)
Hooley, Frank
Robinson, Rt. Hn. Kenneth (St. P'c'as)


Butler, Mrs. Joyce (Wood Green)
Horner, John
Robinson, W. 0. J. (Walth'stow, E.)


Cant, R. B.
Howarth, Harry (Wellingborough)
Rodgers, William (Stockton)


Carmichael, Neil
Hoy, James
Roebuck, Roy


Carter-Jones, Lewis
Hughes, Emrys (Ayrshire, S.)
Rogers, George (Kensington, N.)


Chapman, Donald
Hunter, Adam
Ross, Rt. Hn. William


Coleman, Donald
Jackson, Peter M. (High Peak)
Ryan, John


Concannon, J. D.
Jenkins, Hugh (Putney)
Shaw, Arnold (Ilford, S.)


Corbet, Mrs. Freda
Johnson, Carol (Lewisham, S.)
Shinwell, Rt. Hn. E.


Crossman, Rt. Hn. Richard
Jones, J. Idwal (Wrexham)
Short, Mrs Renée (W'hampton, N. E.)


Dalyell, Tam
Kelley, Richard
Silkin, Rt. Hn. John (Deptford)


Davidson, Arthur (Accrington)
Kenyon, Clifford
Silkin, Hn. S. C. (Dulwich)


Davies, Dr. Ernest (Stretford)
Kerr, Dr. David (W'worth, Central)
Silverman, Julius (Aston)


Davies, Harold (Leek)
Lawson, George
Silverman, Sydney (Nelson)


Davies, Robert (Cambridge)
Lee, Rt. Hn. Frederick (Newton)
Skeffington, Arthur


Dewar, Donald
Lee, John (Reading)
Slater, Joseph


Diamond, Rt. Hn. John
Lestor, Miss Joan
Small, William


Dickens, James
Luard, Evan
Snow, Julian


Dobson, Ray
Lyon, Alexander W. (York)
Spriggs, Leslie


Doig, Peter
Mabon, Dr. J. Dickson
Steel, Thomas (Dunbartonshire, w.)


Driberg, Tom
McCann, John
Strauss, Rt. Hn. G. R.


Dunn, James A.
MacColl, James
Summerskill, Hn. Dr. Shirley


Dunnett, Jack
Macdonald, A. H.
Taverne, Dick


Dunwoody, Dr. John (F'th &amp; C'b'e)
Mackintosh, John P.
Tomney, Frank


Eadle, Alex
Maclennan, Robert
Tuck, Raphael


Edwards, Robert (Bilston)
McMillan, Tom (Glasgow, C.)
Varley, Eric G.


Edwards, William (Merioneth)
MacPherson, Malcolm
Wainwright, Edwin (Deame Valley)


Ellis, John
Mapp, Charles
Walker, Harold (Doncaster)


English, Michael
Marquand, David
Wallace, George


Ensor, David
Marsh, Rt. Hn. Richard
Watkins, David (Consett)


Evans, Albert (Islington, S. W.)
Maxwell, Robert
Wellbeloved, James


Faulds, Andrew
Mayhew, Christopher
Whitlock, William


Fitch, Alan (Wigan)
Mikardo, Ian
Willey, Rt. Hn. Frederick


Fletcher, Raymond (Ilkeston)
Miller, Dr. M. S.
Williams, Alan (Swansea, W.)


Fletcher, Ted (Darlington)
Mitchell, R. C. (S'th'pton, Test)
Williams, Alan Lee (Hornchurch)


Floud, Bernard
Molloy, William
Wilson, Rt. Hn. Harold (Huyton)


Foot, Michael (Ebbw Vale)
Morris, Charles R (Openshaw)
Wilson, William (Coventry, S.)


Forrester, John
Murray, Albert
Yates, Victor


Fowler, Gerry
Newens, Stan
Zilliacus, K.


Fraser, John (Norwood)
Norwood, Christopher



Garrow, Alex
Ogden, Eric
TELLERS FOR THE AYES:


Ginsburg, David
O'Malley, Brian
Mr. Ioan L. Evans and


Gourlay, Harry
Orme, Stanley
Mr. McBride




NOES


Alison, Michael (Barkston Ash)
Crawley, Aidan
Harvie, Anderson, Miss


Allason, James (Hemel Hempstead)
Crosthwaite-Eyre, Sir Oliver
Hastings, Stephen


Atkins, Humphrey (M't'n &amp; M'd'n)
Crouch, David
Hawkins, Paul


Awdry, Daniel
Cunningham, Sir Knox
Heald, Rt. Hn. Sir Lionel


Baker, W. H. K.
Dance, James
Heseltine, Michael


Batsford, Brian
Dean, Paul (Somerset, N.)
Higgins, Terence L.


Beamish, Col. Sir Tufton
Dodds-Parker, Douglas
Hill, J. E. B.


Bennett, Sir Frederic (Torquay)
Drayson, G. B.
Hirst, Geoffrey


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Eden, Sir John
Hobson, Rt. Hn. Sir John


Biffen, John
Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Holland, Philip


Black, Sir Cyril
Errington, Sir Eric
Hooson, Emlyn


Body, Richard
Farr, John
Hornby, Richard


Boyd-Carpenter, Rt. Hn. John
Fisher, Nigel
Howell, David (Guildford)


Brewis, John
Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Hunt, John


Bromley-Davenport, Lt. Col. Sir Walter
Gilmour, Ian (Norfolk, C.)
Hutchison, Michael Clark


Buchanan-Smith, Alick (Angus, N&amp;M)
Glover, Sir Douglas
Iremonger, T. L.


Bullus, Sir Eric
Goodhart, Philip
Irvine, Bryant Godman (Rye)


Campbell, Gordon
Goodhew, Victor
Jenkin, Patrick (Woodford)


Cary, Sir Robert
Grant, Anthony
Jennings, J. C. (Burton)


Chichester-Clark, R.
Gresham Cooke, R.
Joseph, Rt. Hn. Sir Keith


Clark, Henry
Grieve, Percy
Kirk, Peter


Clegg, Walter
Griffiths, Eldon (Bury St. Edmunds)
Knight, Mrs. Jill


Cooke, Robert
Grimond, Rt. Hn. J.
Lloyd, Rt. Hn. Selwyn (Wirral)


Cooper-Key, Sir Neill
Harris, Frederic (Croydon, N. W.)
McAdden, Sir Stephen


Costain, A. P.
Harris, Reader (Heston)
Maddan, Martin


Craddock, Sir Beresford (Spelthorne)
Harvey, Sir Arthur Vere
Marples, Rt. Hn. Ernest







Mathew, Robert
Price, David (Eastleigh)
Taylor, Edward M. (G'gow, Cathcart)


Maude, Angus
Prior, J. M. L,
Taylor, Frank (Moss Side)


Mawby, Ray
Pym, Francis
Thorpe, Jeremy


Maxwell-Hyslop, R. J.
Rees-Davies, W. R,
Turton, Rt. Hn. R. H.


Mills, Stratton (Belfast, N.)
Ridley, Hn. Nicholas
Wainwright, Richard (Colne Valley)


Mitchell, David (Basingstoke)
Rippon, Rt. Hn. Geoffrey
Walker-Smith, Rt. Hn. Sir Derek


Monro, Hector
Roots, William
Weatherill, Bernard


More, Jasper
Rossi, Hugh (Hornsey)
Webster, David


Morgan, Geraint (Denbigh)
Royle, Anthony
Whitelaw, William


Morrison, Charles (Devizes)
Russell, Sir Ronald
Wilson, Geoffrey (Truro)


Murton, Oscar
Scott, Nicholas
Winstanley, Dr. M. P.


Nabarro, Sir Gerald
Sharples, Richard
Wolrige-Gordon, Patrick


Nott, John
Shaw, Michael (Sc'b'gh &amp; Whitby)
Wood, Rt. Hn. Richard


Onslow, Cranley
Sinclair, Sir George
Woodnutt, Mark


Orr-Ewing, Sir Ian
Smith, John
Younger, Hn. George


Osborn, John (Hallam)
Steel, David (Roxburgh)



Page, Graham (Crosby)
Stodart, Anthony
TELLERS FOR THE NOES:


Percival, Ian
Tapsell, Peter
Mr. Blaker and Mr. Eyre.


Pink, R. Bonner
Taylor, Sir Charles (Eastbourne)

Mr. Willey: I beg to move Amendment No. 79, in page 56, line 39, to leave out 'either'.
I think that it would meet the convenience of the House if we took Amendments No. 80, No. 84 and No. 85 with this Amendment, Mr. Speaker.

Mr. Speaker: If there is no objection.

Mr. Willey: We are here dealing with land which has been used for charitable purposes, and ceasing to be charitable land because it has been used for non-charitable purposes. We provided in the Bill that if it was used for such non-charitable purposes for five years it would then be taken out of its charitable use, or would be if there was development of the land for non-charitable purposes.
I have had representations since the Committee stage that this might bear unfairly on some charities, that they might have an interim, temporary development, and that, under the provisions as they are in the Bill, that would result in the land ceasing to be for charitable purposes. I am thinking of charities such as the Peabody Trust. I think that in the circumstances, therefore, the second condition would be better removed and that we should rely on the five-year test. I hope that this will be acceptable to the House.

Mr. Graham Page: This is at least a crumb of comfort. Of course, the Minister only got into this trouble by trying to impose a levy on investment land or on developed land belonging to permanent funds. That is why he has had to make these Amendments to relieve such charities as the Peabody Trust and others who have seen that they would be caught by the levy when they really did not deserve to be caught at all.
I did think that our plea just now had succeeded—to a greater extent than I expected—when I saw the right hon. Gentleman the Prime Minister sitting next to the Minister. I thought that at last we had succeeded in getting him here, if not the Attorney-General or the Chancellor of the Exchequer. However, I fear that the Minister murmured in the Prime Minister's ear that we were talking about charities, and he, like the Minister of Social Security, shot out of the door like a rocket. We on this side cannot expect anyone on that side, even Ministers, to take an interest even on important matters like this when we are going some way to ease the burden on charities. It is quite shocking that more Members on that side of the House are not taking an interest in this vitally important Clause, which affects charities in their constituencies.

Amendment agreed to.

Further Amendment made: In page 56, line 40, leave out from 'years' to end of line 43.—[Mr. Willey.]

Clause 58.—(STATUTORY UNDERTAKERS AND NATIONAL COAL BOARD.)

Mr. Skeffington: I beg to move Amendment No. 81, in page 57, line 14, to leave out 'Case A or Case B' and to insert:
'any of the Cases other than Case C'.
I have been refreshing my mind of the very interesting discussion we had in Committee upstairs about statutory undertakers, and I am at least glad to be reminded that the hon. Gentleman the Member for Crosby (Mr. Graham Page) did put on record how helpful I always try to be to him, though he was unkind enough to vote against the Clause. I notice that I was led into making all kinds of pronouncements about what was


operational land, and so on. I think that, on the whole, I did not commit any great inaccuracy, but I certainly do not intend to traverse so wide a field in moving this Amendment now.
We are making an attempt by this and two subsequent Amendments to meet some of the points of doubt raised then, and to meet representations made to us from outside. The result is that we are really giving equality of treatment to all the categories of land—that is to say, putting Cases D, E and F in relation to operators covered by Clause 58 in the same category as Cases A and B.
At the moment, they are separately dealt with, and the result is that while the exemption from levy in Cases D, E and F is restricted to land which is operational at the time of the chargeable act, the exemption in cases A and B applies after the land has ceased to be operational and has since not been used for any purpose for more than five years.
In view of some of the comments made by hon. Members opposite and of other representations that we have received that there is no case for continuing this distinction, we think it better to treat the cases alike. This is secured by the Amendment. I should like also to refer to Amendment No. 83, which seeks to leave out subsection (2) and I would comment that the Bill will be to that degree shorter, which I am sure will please hon. Members opposite. These Amendments give equality of treatment to those categories of land.

Mr. Farr: This Amendment provides the only opportunity which the House will be given to discuss the exceptionally privileged position in which statutory undertakers, such as the National Coal Board, the British Transport Commission and other nationalised concerns, are placed by not being required to pay the levy. This is obviously a matter which many hon. Members feel should be examined, and I trust, therefore, that if I do not keep exactly to this Amendment, Mr. Speaker, I may have your indulgence. I shall, of course, follow it very closely——

Mr. Speaker: Order. With all kindness to the hon. Member, I must tell him that what he intends to say must have some relevance to the Amendment.

Mr. Farr: Yes, Sir. I understand that.
Clause 58, to which the Government's Amendment relates, exempts statutory undertakers from paying a levy. For that reason alone hon. Members on this side of the House are very grateful to the Government Front Bench for, so to speak, playing scrabble with the different case letters, which has enabled us to have a short discussion on this point.
Earlier, we have seen in Clause 56 that local authorities are exempt from levy——

Mr. Speaker: Order. We are not discussing Clause 56. We are discussing the modification in Cases A, B, C, D, E and F only.

Mr. Farr: Yes, Mr. Speaker.
I was referring to Clause 56 en passant to say that the House had earlier given its assent to that Clause and allowed the local authorities to be exempt from levy, which places them in a very privileged position compared to the private builder building houses for sale. Here in Clause 58, as is emphasised in the Government's Amendments, we have a number of nationalised concerns being placed in a highly privileged position compared to those in private industry.

Mr. Speaker: Order. Correct me if I am wrong, but I am under the impression that that is done by the Clause and not by the Amendment or by its rejection. I must point out to the hon. Member that on Report there is no Question, "That the Clause stand part of the Bill."

Mr. Farr: I will not try your patience any longer, Mr. Speaker. I was trying to point out the highly privileged position that nationalised concerns enjoy under this Clause, and I thought that I might be allowed to stray a little from this Amendment. However, I accept your Ruling without hesitation, Mr. Speaker.

Mr. Speaker: I am afraid that the hon. Gentleman strayed quite a lot. Mr. Graham Page.

6.45 p.m.

Mr. Graham Page: I do not think that I can be quite as kind to the Parliamentary Secretary on this occasion as I was in Committee. He has left the House in very grave doubt as to the effect of


these Amendments. I should like to see if I have understood what he meant by them. As the Clause stood, under Cases D and E—the case of compensation for revocation of planning permission and the case of easements, restrictive covenants, and so on—no levy was chargeable, irrespective of what one did with the land.
Now, according to the Amendment and by the removal of subsection (2), Cases D, E and F come within the general rules relating to the land of statutory undertakers, so that if there is to be any relief the statutory undertaker or the National Coal Board must show that, whatever case we are dealing with—either Cases A, B, D or F—the interest out of which a tenancy is created was vested in the statutory undertaker immediately before the relevant date—that is, that at the time that the chargeable act occurred the statutory undertakers held the land, which should be an easy process to discover. In addition, the relevant land must have been operational immediately before that date, or if it ceases to be operational, it should not have been passed over for non-operational purposes.
It is the word "operational" which worries us on this side of the House. May I take a simple example. The Central Electricity Generating Board or its generating premises are operational. But are its shops, which sell electrical equipment, on operational land? Will they be affected by this Amendment if some easement is given over the shop or a restrictive covenant is imposed or a planning permission revoked so that compensation is paid? Are we dealing with that sort of thing as operational or non-operational?
The Electricity Board, for example, is operational in producing electricity. I do not know whether it is operational in selling refrigerators. If it is, if the shop is operational, what happens if it lets off a flat above the shop or it lets part of the shop to some other concern? Does that become operational and does one have to apply the provisions which this Amendment seeks to amend? I cannot see why statutory undertakers should be exempt. They are all commercial undertakings. Therefore, we look at this Amendment with considerable suspicion. It seems to be grouping all the Cases into one group, exempting them all from

levy if it is operational land of the statutory undertakers.
I hope that the Parliamentary Secretary, with the leave of the House, or the Minister, will explain this Amendment a little further. I should like some assurance that a statutory undertaker will be relieved of the levy only in the case of land and property which are used for the purpose of producing the service or goods for which that undertaking was formed, and not its marginal ancillary trading in competition with other traders in selling equipment, whether gas or electricity, or the Coal Board making bricks.

Mr. Rossi: On a point of order. Despite the tremendous importance of this oppressive Bill to the country, may I draw attention to the fact that there are only eight Members present on the benches opposite, which is a 50 per cent. increase on the number throughout the afternoon, and that there are fewer than 40 Members present in the Chamber?

Mr. Speaker: It is a very interesting point of order, but it cannot be raised at this moment. We have just had a Division.

Mr. Skeffington: I should probably be out of order if I were to answer all the questions of the hon. Member for Crosby (Mr. Graham Page). Perhaps I can refer him to Section 221 of the Town and Country Planning Act, 1962, where he knows that "operational land" is defined. The hon. Gentleman knows this because we discussed it in Committee, and I do not suppose that he has forgotten. It is for the Minister to decide, when there is a dispute, whether the land is operational. I should not be led into giving a definition of electricity showrooms, but they would not be operational land for this purpose.
The only other point which is germane—

Mr. Graham Page: Before the hon. Gentleman leaves that point—

Mr. Skeffington: I hope that the hon. Gentleman will not draw attention to the fact that I am probably out of order.

Mr. Page: I am sure that the Parliamentary Secretary is speaking with the leave of the House.
The definition in Section 221 of the Town and Country Planning Act is:
'operational land', in relation to statutory undertakers, means land which is used for the purpose of the carrying on of their undertaking and land in which an interest is held for that purpose, not being land which, in respect of its nature and situation, is comparable rather with land in general than with land which is used, or in which interests are held, for the purpose of the carrying on of statutory undertakings
I am not surprised that the hon. Gentleman did not say what electricity show rooms were, but he is under an obligation to do so in proposing this Amendment.

Mr. Skeffington: I hesitate to continue along these lines, but, as long as I am allowed to do so, may I say that if there is any question about whether land is operational a further provision provides that this must be the function of the appropriate Minister. It is not my function. But I hazarded a guess, which is perhaps unwise, to be helpful. All these undertakers in respect of the five categories of land are put in the same position.
The only other point for me to answer is why have "operational land" in the Bill. I discussed this in Standing Committee. "Operational land" cannot be varied because there is nothing to compare it with. That is why the exception has to be made.

Amendment agreed to.

Further Amendments made: In page 57, line 15, after 'A' insert:
'or in any of Cases D to F'.

In line 26, leave out subsection (2).

In page 58, line 10, leave out 'either'.

In line 11, leave out from 'years' to end of line 14.—[Mr. Skeffington.]

Clause 59.—(HOUSING ASSOCIATIONS.)

Mr. Graham Page: I beg to move Amendment No. 211, in page 58, line 36, to leave out from "association" to the end of line 37.

Mr. Speaker: It is proposed that we should take, at the same time, Amendment No. 212, in page 58, line 41, leave out from "association' to 'no' in line 43; and Amendment No. 213, in page 59, line 1, leave out subsection (3).

Mr. Graham Page: I return to my most intelligent form of the Bill, the one which I can really understand, the one which does not need any effort in understanding,

and that is the print which I obtained from the Vote Office and which, on pages 58 and 59, is completely blank. This is the one that I can understand. I struggled with the other one, but instead of leaving the pages blank the other Bill leaves my mind blank.
It is clear what the Minister desires to achieve by Clause 59, and I hope that it is clear to me what the Amendment seeks to achieve. In the Clause, housing associations are, rightly, exempt from levy. These are bodies carrying out the good work of providing homes for people on a non-profit basis. They have, quite properly certain privileges in their trading and provision of homes. The present Government and the past Government have sought to encourage and increase the number of these institutions. It is, therefore, right that they should be exempted from paying the levy.
But the Minister smudges the whole effort by saying that they shall get exemption only if he gives them a certificate. This provision is in the last few words of subsection (1). Subsection (1) provides that the levy shall not be chargeable in the case of land held
in trust for a housing association",?
and that housing associations shall be exempt only if
a certificate under this section is issued in respect of that act or event".
We wish to remove that. If we remove those lines, it is necessary to remove some lines in subsection (2), which refer to a certificate, and the whole of sub section (3), which describes the power to issue certificates.
A housing association is either a housing association or it is not. It has certain approvals before it becomes an association. It is watched over by officials appointed by the Government. No one can dispute whether a housing association is a housing association. When carrying out its work of providing houses, it should have exemption without any interference by the Minister. I cannot see the reason for the Minister having a finger in this and having to give a certificate in order to exempt a housing association. Housing associations should be exempt from the levy because they are bodies approved as coming within that category.
The certificate of the Minister carries the matter neither one way or the other.


If he refused a certificate, he would do so for some extraneous reason—it could not be anything to do with the housing association—and I cannot see what it is. It would be far better to give the exemption outright without having to issue a certificate.

7.0 p.m.

Sir Douglas Glover: I intervene briefly because I happen to be chairman of a housing association and also a member of the Council of the National Federation. I ask the Minister to accept the Amendment. I cannot see the need for the certificate. Because of all the necessary safeguards that the State already imposes, there is enough frustration in getting a project off the ground without, in addition, having to wait for a certificate.
I am not certain how this would work in practice. A housing association first gets a piece of land which it regards as suitable for property. It then has to be cleared with the valuation officer whether the price at which the association buys the land is right. The association then has to clear it with the housing corporation to find whether it will back the finances.
The person who owns the piece of land is probably under offer from other people. One cannot say at this stage of the Bill how long it will take to get a certificate, but if it is automatic there is no point in having one. It could involve delay of weeks or months. The housing association, having gone to all the trouble to find the site, will then write to the Land Commission. The Commission might or might not be dilatory.
The housing association cannot approach anybody else until it has the clearance with the certificate, and it then has to go through the operation of all the other machinery. The result is that by the time that the housing association goes back to the owner to say that it will buy his land, the reply will be, "I am sorry, we sold it a fortnight ago." This is just another obstacle to the success of housing associations.
If a housing association automatically gets a certificate, what is the need for it? It is not as though I could start a housing association tomorrow. To form a housing association, one has to be

approved. Unless we are approved, we cannot operate. It is, therefore, accepted that all the existing housing associations are respectable organisations. They are non-profit making, some of them work on a basis of co-ownership, some on a cost-rent principle and some cater for the needs of old people. There are various categories of association, all of them doing a most desirable job.
The one thing which has worried me since I became involved in this movement is the frustration and delay in getting projects off the ground. With no evil intent on anybody's part, we have not yet laid a brick and we have been in existence for nearly two years. During that two years we have been getting sites, but with all the bureaucratic delay that automatically occurs when safeguards are necessary, progress is slow. In the Clause, the Minister is making that progress even more protracted and more frustrating.
I cannot see what danger there would be in accepting the Amendment. I sincerely hope that the Minister will at least say that he will consider it and discuss it, perhaps, with the National Federation. Unless he accepts the Amendment, he will only put another hurdle on the road to the success, which both parties wish to see, of these associations.

Mr. Willey: It is the grounds that the hon. Member for Ormskirk (Sir D. Glover) has given that justify the Clause. As the hon. Member has said, there is a great range and variety of housing associations. In the Clause, we are concerned only with those which are not charities. The hon. Member indicated that there were a large number of housing associations—some 1,500—which vary greatly in character, some being run by industrial firms and some by ordinary housing developers. In view of this, it is right and proper to retain this discretion with the appropriate Minister, the Minister of Housing.

Dr. M. P. Winstanley: Do I understand from what the Minister says that there are certain categories of housing association to which he would refuse exemption?

Mr. Willey: I am saying that in these circumstances it is right that there should be a discretion.

Mr. Rippon: Is the Minister really saying that the imposition of taxation should be discretionary?

Sir Derek Walker-Smith: I am not sure whether the Minister has finished his speech. If he has, it was sadly incomplete, because he was invited to give reasons for this rather strange provision but did not succeed in adducing a single reason.
The Clause is designed to exempt these housing associations from levy. We then get the phrase
and a certificate under this section is issued in respect of that act or event".
Subsection (3) defines the power to issue certificates and goes on to say:
and any such certificate shall certify that, in the opinion of the Minister issuing the certificate, it is in the circumstances of the case in the public interest…
What circumstances will guide the Minister in issuing or withholding these certificates?
Will the Minister be in a position to discriminate and say that it is in the public interest in one case of an appropriately registered and authorised housing association but not in another case? On what principles and according to what criteria will the Minister exercise this jurisdiction which he arrogates to himself by the Clause?
It is extremely unsatisfactory that matters such as this, involving discrimination, should be left to the sole discretion of the Minister without any principles prescribed by statute. It should be a task from which any Minister, especially Ministers like the right hon. Gentleman and his hon. Friend, who are bred in the learning and practice of the law, should shrink. They should not invite and seek to assume such unwelcome jurisdiction as this. Surely, if the Minister has no better explanation than he has vouchsafed to the House, he should accept the Amendment and accept it gladly and with gratitude.

Dr. Winstanley: I had not intended to speak, but in view of the Minister's reply I should say that the Liberal Party is entirely in favour of the Amendment and regard it as a natural simplification.
At first, when I read the Clause and the Amendment, it seemed to me that the issuing of a certificate in these circumstances

was merely an additional bureaucratic formality which would simply be a nuisance and would serve no useful purpose. That was bad enough, and we hoped that the Minister might see the point of that and be willing to remove it.
In his answer to the hon. Member for Ormskirk (Sir D. Glover), however, the Minister agreed that there were a variety of different kinds of housing association and this, the right hon. Gentleman said, was why it was necessary to have the certification procedure. In other words, the implication is that it is to enable the Minister to discriminate as between one kind of housing association and another.
We would like to know whether it is the Government's intention to give complete exemption in this way to housing associations. If it is, why not do it? They have subsection (4) in the Clause, which defines what a housing association is. If that is the Government's intention, they could surely leave it at that. We are entitled to assume, however, that if they want this additional procedure, it means that they intend to place obstacles in the way of certain housing associations that the Minister has not defined.

Mr. Richard Body: I wonder whether the right hon. Gentleman would be good enough to amplify what he said about the Clause in Standing Committee? He then explained to the Committee that some housing associations were charities and some were not, and he went on to say that some of them might be ordinary developers, as if that was something quite dreadful. He then said something which I had some difficulty in understanding. He said that some of the work is supplementary to what is done by the local authorities, and I have the suspicion that the wide discretionary power which he is taking will be used against those housing authorities which are in any way competing with local authority building. That is the only way in which I can interpret what he said in Standing Committee, as reported in c. 697 of the proceedings.
Perhaps the right hon. Gentleman would be good enough to assure the housing associations that the fear which I have expressed is not a real one and that he will not exercise this wide discretionary power to impose a levy on housing associations in those circumstances.

Mr. Rippon: I hope that the Minister will understand that we on this side of the House feel strongly that his answer is wholly unsatisfactory. I must say that I thought he might well accept this Amendment on the ground that it would clarify the position and that if he was satisfied that housing associations had been constituted properly, that was the end of the matter. I shared the view expressed from the Liberal benches that this was a bit of unnecessary bureaucracy insisting that a housing authority ought to have a certificate to show that all was well.
I was astonished by the Minister's declaration. Without any sort of explanation, he said that he would retain the power to determine any guiding principles as to whether a housing association should be taxed or not.
I know that he has said time and time again that this is not a tax. In the absence of a Law Officer, I suppose that we must rely on the Minister to explain to us what is the difference between a tax and a levy. It is bad enough that the Bill provides virtually for taxation by Order instead of through the normal processes of a Finance Bill, but when we are to have taxation levied by Order and, on top of that, the discretion of the Minister whether the tax should be levied, it is intolerable. It offends every principle of taxation as understood in this country for centuries that a tax should be certain and that people should know whether or not they have to pay it.
Will the Minister try and explain to us why there is a difference between a levy and a tax and, if this is a tax, will he agree that all his arguments fall to the ground?

Mr. Willey: I have assured the right hon. Gentleman on several occasions that this is not a tax. It is a matter which we have discussed repeatedly during our consideration of the Bill. I thought that by now it was generally accepted, except, apparently, by the right hon. Gentleman,

who has not had the advantage of being with us all the time.

I give the hon. Member for Holland with Boston (Mr. Body) the assurance for which he asked. In resisting the Amendment, I rely on the ground that the safeguard ought to reside with the Minister.

Mr. Clegg: The Minister's replies throughout our debate have been rather like life—short, nasty and brutish. He was asked a specific question by the hon. Member for Cheadle (Dr. Winstanley): will he discriminate or not? He can be equally short, nasty and brutish in answering that question, and we shall then know where we stand.
The more that I listen to the good intentions expressed by the Minister, the more I am appalled as a lawyer. It means that any judge, in the Government's contention, must have the proceedings of the Committee upstairs, this Report stage and no doubt Third Reading before him as a sort of vade-mecum in order to interpret the Act.
In my experience, judges do not take kindly to any advocate who produces such proceedings. They say that it is not what the Minister said which is important. It is what Parliament said, what the House of Lords confirmed and what Her Majesty confirmed. That is what counts in the courts, and not these good intentions put forward by the right hon. Gentleman and the other part of that dynamic duo, the Parliamentary Secretary.
I think that we ought to press the right hon. Gentleman for an answer to the simple question put by the hon. Member for Cheadle—a simple yes or no. It will not take long and it will not hurt the right hon. Gentleman to do it. Please let us have an answer to a specific question.

Hon. Members: Answer.

Question put, That the words proposed to be left out stand part of the Bill:—

The House divided: Ayes 167, Noes 113.

Division No. 187.]
AYES
[7.15 p.m.


Abse, Leo
Bacon, Rt. Hn. Alice
Blenkinsop, Arthur


Allen, Scholefield
Bagier, Gordon A. T.
Booth, Albert


Anderson, Donald
Beaney, Alan
Boston, Terence


Archer, Peter
Bennett, James (G'gow, Bridgeton)
Bray, Dr. Jeremy


Ashley Jack
Bidwell, Sydney
Brooks, Edwin


Atkins, Ronald (Preston, N.)
Bishop, E. S.
Brown, Rt. Hn. George (Belper)


Atkinson, Norman (Tottenham)
Blackburn, F.
Brown, Hugh D. (G'gow, Provan)




Brown, Bob (N'c'tle-upon-Tyne, W.)
Hattersley, Roy
Owen, Dr. David (Plymouth, S'tn)


Brown, R. W. (Shoreditch &amp; F'bury)
Hazell, Bert
Padley, Walter


Butler, Herbert (Hackney, C.)
Harbison, Rt. Hn. Margaret
Palmer, Arthur


Butler, Mrs. Joyce (Wood Green)
Hilton, W. S.
Park, Trevor


Cant, R. B.
Hooley, Frank
Parker, John (Dagenham)


Carmichael, Neil
Horner, John
Parkyn, Brian (Bedford)


Carter- Jones, Lewis
Howarth, Harry (Wellingborough)
Perry Ernest G. (Battersea, S.)


Chapman, Donald
Hoy, James
Perry, George H. (Nottingham, S.)


Coleman, Donald
Hughes, Emrys (Ayrshire, S.)
Prentice, Rt. Hn. R. E.


Concannon, J. D.
Hughes, Roy (Newport)
Price, William (Rugby)


Corbet, Mrs. Freda
Hunter, Adam
Reynolds, G. W.


Crossman, Rt. Hn. Richard
Jackson, Peter M. (High Peak)
Robertson, John (Paisley)


Dalyell, Tam
Jeger, Mrs. Lena (H'b'n&amp;St.P'cras, S.)
Robinson, Rt. Hn. Kenneth (St. P'c'as)


Davidson, Arthur (Accrington)
Jenkins, Hugh (Putney)
Robinson, W. O. J. (Walth'stow, E.)


Davies, Dr. Ernest (Stretford)
Johnson, Carol (Lewisham, S.)
Roebuck, Roy


Davies, Harold (Leek)
Jones, J. Hn. SirElwyn (W. Ham, S.)
Rogers George (Kensington, N.)


Davies, Robert (Cambridge)
Jones, J. Idwal (Wrexham)
Ross, Rt. Hn. William


Dewar, Donald
Kelley, Richard
Ryan, John


Diamond, Rt. Hn. John
Kenyon, Clifford
Shaw, Arnold (Ilford 8.)


Dobson, Ray
Kerr, Dr. David (W'worth, Central)
Short, Mrs. Renée (W'hampton, N. E.)


Doig, Peter
Lawson, George
Silkin, Rt. Hn. John (Deptford)


Driberg, Tom
Lee, John (Reading)
Silkin, S. C. (Dulwich)


Dunn, James A.
Luard, Evan
Silverman, Julius (Aston)


Dunnett, Jack
Lyon, Alexander W. (York)
Silverman, Sydney (Nelson)


Dunwoody, Dr. John (F'th &amp; C'b'e)
Mabon, Dr. J. Dickson
Skeffington, Arthur


Eadie, Alex
McBride, Neil
Slater, Joseph


Edwards, Robert (Bilston)
McCann, John
Small, William


Edwards, William (Merioneth)
MacColl, James
Snow, Julian


Ellis, John
Macdonald, A. H.
Spriggs, Leslie


English, Michael
Maclennan, Robert
Steele, Thomas (Dunbartonshire, W.)


Ensor, David
McMillan, Tom (Glasgow, C.)
Summerskill, Hn. Dr. Shirley


Evans, Albert (Islington, S. W.)
MacPherson, Malcolm
Taverne, Dick


Evans, Ioan L. (Birm'h'm, Yardley)
Marquand, David
Tomney, Frank


Faulds, Andrew
Marsh, Rt. Hn. Richard
Varley, Eric G.


Fitch, Alan (Wigan)
Mason, Roy
Wainwright, Edwin (Dearne Valley)


Fletcher, Raymond (Ilkeston)
Maxwell, Robert
Walker, Harold (Doncaster)


Fletcher, Ted (Darlington)
Mayhew, Christopher
Wallace, George


Floud, Bernard
Mellish, Robert
Watkins, David (Consett)


Foot, Michael (Ebbw Vale)
Miller, Dr. M. S.
Wellbeloved, James


Forrester, John
Mitchell, R. C. (S'th'pton, Test)
Willey, Rt. Hn. Frederick


Fowler, Gerry
Molloy, William
Williams, Alan (Swansea, W.)


Fraser, John (Norwood)
Morris, Charles R. (Openshaw)
Williams, Alan Lee (Hornchurch)


Gourlay, Harry
Murray, Albert
Wilson, Rt. Hn. Harold (Huyton)


Gray, Dr. Hugh (Yarmouth)
Newens, Stan
Wilson, William (Coventry, S.)


Gregory, Arnold
Noel-Baker, Rt. Hn. Philip (Derby, S.)
Yates, Victor


Griffiths, David (Rother Valley)
Norwood, Christopher
Zilliacus, K.


Hamilton, William (Fife, W.)
Ogden, Eric



Hamling, William
O'Malley, Brian
TELLERS FOR THE AYES:


Hannan, William
Orbach, Maurice
Mr. Whitlock and


Harper, Joseph
Orme, Stanley
Mr. Walter Harrison.




NOES


Alison, Michael (Barkston Ash)
Eden, Sir John
Iremonger, T. L.


Allason, James (Hemel Hempstead)
Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Irvine, Bryant Godman (Rye)


Atkins, Humphrey (M't'n &amp; M'd'n)
Errington, Sir Eric
Jenkin, Patrick (Woodford)


Awdry, Daniel
Farr, John
Jennings, J. C. (Burton)


Baker, W. H. K.
Fisher, Nigel
Joseph, Rt. Hn. Sir Keith


Batsford, Brian
Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Kirk, Peter


Beamish, Col. Sir Tufton
Gilmour, Ian (Norfolk, C.)
Knight, Mrs. Jill


Bennett, Sir Frederic (Torquay)
Glover, Sir Douglas
McAdden, Sir Stephen


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Goodhart, Philip
Maddan, Martin


Biffen, John
Goodhew, Victor
Maude, Angus


Black, Sir Cyril
Grant, Anthony
Mawby, Ray


Blaker, Peter
Grieve, Percy
Maxwell-Hyslop, R. J.


Body, Richard
Griffiths, Eldon (Bury St. Edmunds)
Mitchell, David (Basingstoke)


Boyd-Carpenter, Rt. Hn. John
Halt, John (Wycombe)
Monro, Hector


Brewis, John
Harris, Frederic (Croydon, N. W.)
Morgan, Geraint (Denbigh)


Buchanan-Smith, Alick (Angus, N&amp;M)
Harris, Reader (Heston)
Morrison, Charles (Devizes)


Bullus, Sir Eric
Harvey, Sir Arthur Vere
Murton, Oscar


Campbell, Gordon
Harvie Anderson, Miss
Nott, John


Chichester-Clark, R.
Hastings, Stephen
Orr-Ewing, Sir Ian


Clark, Henry
Hawkins, Paul
Osborn, John (Hallam)


Clegg, Walter
Heald, Rt. Hn. Sir Lionel
Page, Graham (Crosby)


Cooke, Robert
Heseltine, Michael
Percival, Ian


Cooper-Key, Sir Neill
Higgins, Terence L.
Pink, R. Bonner


Costain, A. P.
Hill, J. E. B.
Price, David (Eastleigh)


Craddock, Sir Beresford (Spelthorne)
Hirst, Geoffrey
Prior, J. M. L.


Crawley, Aidan
Hobson, Rt. Hn. Sir John
Pym, Francis


Crosthwaite-Eyre, Sir Oliver
Holland, Philip
Rees-Davies, W. R.


Crouch, David
Hornby, Richard
Ridley, Hn. Nicholas


Cunningham, Sir Knox
Howell, David (Guildford)
Rippon, Rt. Hn. Geoffrey


Dance, James
Hunt, John
Roots, William


Dean, Paul (Somerset, N.)
Hutchison, Michael Clark
Rossi, Hugh (Hornsey)







Russell, Sir Ronald
Taylor, Sir Charles (Eastbourne)
Winstanley, Dr. M. P.


Scott, Nicholas
Taylor, Frank (Moss Side)
Wolrige-Gordon, Patrick


Sharples, Richard
Wainwright, Richard (Colne Valley)
Woodnutt, Mark


Shaw, Michael (Sc'b'gh &amp; Whitby)
Walker-Smith, Rt. Hn. Sir Derek
Younger, Hn. George


Sinclair, Sir George
Weatherill, Bernard



Smith, John
Webster, David
TELLERS FOR THE NOES:


Steel, David (Roxburgh)
Whitelaw, William
Mr. More and Mr. Eyre.


Stodart, Anthony
Wilson, Geoffrey (Truro)

Clause 60.—(EXEMPTION FROM LEVY IN CASE C SHORTLY AFTER DISPOSITION FALLING WITHIN CASE A OR CASE B.)

Mr. Skeffington: I beg to move Amendment No. 86, in page 59, line 28, after 'shall', to insert
'specify the disposition to which it relates and'.
This is a drafting Amendment, but quite an important one. The reason for it is that, as the Clause stands, the regulations made prescribing the particulars to be contained in the application do not have to prescribe that the disposition to which the notice relates be specified, although obviously it would be so. I am sure that the hon. Member for Crosby (Mr. Graham Page) will be glad to know that in this case, particularly with regard to the matters referred to in Schedule 9, the regulations should also make provision for that to be done.

Amendment agreed to.

Clause 62.—(LIMITED EXEMPTION FOR BUILDERS AND DEVELOPERS OF RESIDENTIAL PROPERTY.)

Mr. Allason: I beg to move, Amendment No. 217, in page 62, line 12, to leave out from 'which' to the first 'the' in line 14.
I think, Mr. Speaker, that it might be convenient to discuss with it Amendment No. 218, in line 16, to leave out 'that'.

Mr. Speaker: Yes.

Mr. Allason: It is necessary to deal with the general implications of the Clause before dealing with the Amendment in order to put the need for it into perspective. The Clause deals with exemption from levy granted to builders with title to that land before 24th September, 1965, and having planning permission. It is necessary to look at this in detail to discover exactly the position of these builders or developers.
They are defined in subsection (6). First, they must have held their title before 24th September, 1965. They must have held their title on the date when

the original White Paper was published, to make sure that they have not in any way anticipated the Government's intention. Secondly, they must have had planning permission then, or, if they did not, they have planning permission which has virtually been back-dated to that date by appeal. They must have obtained planning permission, and they would have had it if the planning permission had been granted before that date.
The next criterion is that they are carrying out a project to build houses. There is also an allowance under subsection (2,b). There may be an allowance for subsidiary buildings which are built in connection with the project, though principally it is for the building of houses. Finally, they have to notify the Commission within six months of the first appointed day that they intend to carry out the development.
The builder or developer who has fulfilled all those conditions clearly has a legitimate title to build without being charged the levy, and it would be retrospective legislation if the levy were charged. This is not a matter of a concession being graciously granted, but the giving of a right which will otherwise be taken away. There is a concession to builders tucked away in paragraph 11 of Schedule 5, for some reason which I have never quite managed to discover, but that has nothing to do with this issue. This is a right, and not a concession.
The effect of the Amendment is to omit "the Commission are satisfied". We are sorry to have to remove the Commission's satisfaction, but it is intolerable that this should be a matter of opinion for the Commission. This, surely, should be a matter of fact. If there is any dispute the Commission should not be a judge in its own case, when it is a matter of a borderline decision.
This is a very important exemption which is fully justified and not something that is graciously granted. It should in no way be related to the opinion of the Commission. We amended Clause 18 yesterday to remove the reference to


the opinion of the Committee, so there is a good precedent for this Amendment. There is no case for the exercise of discretion by the Commission, and I hope that the House will agree to the Amendment.

7.30 p.m.

Mr. Skeffington: The effect of these Amendments would be to remove the discretion of the Commission to decide whether or not the principal purpose of the project was the provision of housing accommodation. There is considerable merit in the purpose of the hon. Member to make the provision work to the advantage of the person who is carrying on the development, but if the Amendment were accepted it would in fact be very much to the disservice of the developer.
What the Commission now has to do, in its discretion, is to decide, during this purely transitional period—because in the course of time the situation will pass away, as the date will no longer be relevant, and developments will not come within its sphere or operation—what is the principal purpose of the project. There may be many circumstances in which it could be argued how much of a project was housing development.
If the Commission is deprived of its discretion in the event of a dispute the issue will have to be sent to the Lands Tribunal to be resolved, and we believe that in the question of the character of development discretion should be with the Commission. The Commission can

decide on merit, in borderline cases, whether there is to be a suitable development of housing accommodation.

If the Amendment were accepted the Lands Tribunal would have discretion to adjudicate, and we say that it would be the wrong body to make this sort of decision. I think that the hon. Member would find that developers would not be as happy with the arrangement as he thinks. There will have to be a formal application to the Lands Tribunal, and no discussion of the matter with the Commission, with cards on the table. I did not notice the Amendment until a day or two ago, but I have discussed this question with hon. Members, and they have not raised any difficulty with me about it.

That is not to say that the hon. Member is wrong, but for this purpose I must advise the House not to accept the Amendment.

Mr. Allason: Will the hon. Gentleman consider the severance provisions concerning an appeal to the Lands Tribunal? There the Lands Tribunal is in an almost identical position, in saying, "Is this a sensible piece of development or not?"

Mr. Skeffington: The same considerations do not apply in connection with the levy. That is why I drew the distinction.

Question put, That the words proposed to be left out stand part of the Bill:—

The House divided: Ayes 160, Noes 111.

Division No. 188.]
AYES
[7.34 p.m.


Abse, Leo
Carmichael, Neil
Faulds, Andrew


Allen, Scholefield
Carter-Jones, Lewis
Fitch, Alan (Wigan)


Anderson, Donald
Chapman, Donald
Fletcher, Raymond (Ilkeston)


Archer, Peter
Coleman, Donald
Fletcher, Ted (Darlington)


Ashley, Jack
Concannon, J. D.
Floud, Bernard


Atkins, Ronald (Preston, N.)
Corbet, Mrs. Freda
Foot, Michael (Ebbw Vale)


Atkinson, Norman (Tottenham)
Dalyell, Tam
Forrester, John


Bacon, Rt. Hn. Alice
Davidson, Arthur (Accrington)
Fowler, Gerry


Bagier, Gordon A. T.
Davies, Dr. Ernest (Stretford)
Fraser, John (Norwood)


Beaney, Alan
Davies, Harold (Leek)
Gourlay, Harry


Bennett, James (G'gow, Bridgeton)
Davies, Robert (Cambridge)
Gray, Dr. Hugh (Yarmouth)


Bidwell, Sydney
Dewar, Donald
Gregory, Arnold


Bishop, E. S.
Diamond, Rt. Hn. John
Griffiths, David (Rother Valley)


Blackburn, F.
Dobson, Ray
Hamilton, William (Fife, W.)


Blenkinsop, Arthur
Doig, Peter
Hamling, William


Booth, Albert
Driberg, Tom
Hannan, William


Boston, Terence
Dunn, James A.
Harper, Joseph


Bray, Dr. Jeremy
Dunnett, Jack
Hattersley, Roy


Brooks, Edwin
Dunwoody, Dr. John (F'th &amp; C'b'e)
Hazell, Bert


Brown, Rt. Hn. George (Belper)
Eadie, Alex
Herbison, Rt. Hn. Margaret


Brown, Hugh D. (G'gow, Provan)
Edwards, Robert (Bilston)
Hilton, W. S.


Brown, Bob (N'c'tle-upon-Tyne, W.)
Edwards, William (Merioneth)
Hooley, Frank


Brown, R. W. (Shoreditch &amp; F'bury)
Ellis, John
Horner, John


Butler, Herbert (Hackney, C.)
English, Michael
Howarth, Harry (Wellingborough)


Butler, Mrs. Joyce (Wood Green)
Ensor, David
Hoy, James


Cant, R. B.
Evans, Albert (Islington, S. W.)
Hughes, Emrys (Ayrshire, S.)




Hughes, Roy (Newport)
Noel Baker, Rt. Hn. Philip (Derby, S.)
Silverman, Sydney (Nelson)


Hunter, Adam
Norwood, Christopher
Skeffington, Arthur


Jackson, Peter M. (High Peak)
Ogden, Eric
Slater, Joseph


Jeger, Mrs. Lena (H'b'n&amp;St.P'cras, S.)
O'Malley, Brian
Small, William


Jenkins, Hugh (Putney)
Orbach, Maurice
Snow, Julian


Johnson, Carol (Lewisham, S.)
Orme, Stanley
Spriggs, Leslie


Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Owen, Dr. David (Plymouth, S'tn)
Steele, Thomas (Dunbartonshire, W.)


Jones, J. Idwal (Wrexham)
Padley, Walter
Summerskill, Hn. Dr. Shirley


Kenyon, Clifford
Palmer, Arthur
Taverns, Dick


Kerr, Dr. David (W'worth, Central)
Park, Trevor
Tomney, Frank


Lawson, George
Parker, John (Dagenham)
Varley, Eric G.


Lee, John (Reading)
Parkyn, Brian (Bedford)
Wainwright, Edwin (Dearne Valley)


Lyon, Alexander W. (York)
Perry, Ernest G. (Battersea, S.)
Walker, Harold (Doncaster)


Mabon, Dr. J. Dickson
Perry, George H. (Nottingham, S.)
Wallace, George


McBride, Neil
Prentice, Rt. Hn. R. E.
Watkins David (Consett)


McCann, John
Price, William (Rugby)
Wellbeloved, James


MacColl, James
Reynolds, G. W.
Whitlock, William


Maclennan, Robert
Robertson, John (Paisley)
Willey, Rt. Hn. Frederick


MacPherson, Malcolm
Robinson, Rt. Hn. Kenneth (St. P'c'as)
Williams, Alan (Swansea W.)


Marquand, David
Robinson, W. O. J. (Walth'stow, E.)
Williams, Alan Lee (Hornchurch)


Marsh, Rt. Hn. Richard
Roebuck, Roy
Wilson, Rt. Hn. Harold (Huyton)


Mason, Roy
Rogers, George (Kensington, N.)
Wilson, William (Coventry, S.)


Mellish, Robert
Ross, Rt. Hn. William
Yates, Victor


Miller, Dr. M. S.
Ryan John
Zilliacus, K.


Mitchell, R. C. (S'th'pton. Test)
Shaw, Arnold (Ilford, S.)



Molloy, William
Short, Mrs. Renée (W'hampton, N. E.)
TELLERS FOR THE AYES:


Morris, Charles R. (Openshaw)
Sitkin, Rt. Hn. John (Deptford)
Mr. Walter Harrison and


Murray, Albert
Silkin, Hn. S. C. (Dulwich)
Mr. loan L. Evans.


Newens, Stan
Silverman, Julius (Aston)





NOES


Alison, Michael (Barkston Ash)
Grieve, Percy
Murton, Oscar


Allason, James (Hemel Hempstead)
Griffiths, Eldon (Bury St. Edmunds)
Nott, John


Atkins, Humphrey (M't'n &amp; M'd'n)
Hall, John (Wycombe)
Orr-Ewing, Sir Ian


Awdry, Daniel
Harris Frederic (Croydon, N. W.)
Osborn, John (Hallam)


Baker, W. H. K.
Harris, Reader (Heston)
Page, Graham (Crosby)


Batsford, Brian
Harvey, Sir Arthur Vere
Percival, Ian


Bennett, Sir Frederick (Torquay)
Harvie Anderson, Miss
Pink, R, Bonner


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Hastings, Stephen
Price, David (Eastleigh)


Biffen, John
Hawkins, Paul
Prior, J. M. L.


Blaker, Peter
Heald, Rt. Hn. Sir Lionel
Pym, Francis


Body, Richard
Heath, Rt. Hn. Edward
Rees-Davies, W. R.


Boyd-Carpenter, Rt. Hn. John
Heseltine, Michael
Rippon, Rt. Hn. Geoffrey


Brewis, John
Higgins, Terence L.
Roots William


Buchanan-Smith, Alick (Angus, N&amp;M)
Hill, J. E. B.
Rossi, Hugh (Hornsey)


Bullus, Sir Eric
Hobson, Rt. Hn. Sir John
Russell, Sir Ronald


Campbell, Gordon
Holland, Philip
Scott, Nicholas


Chichester-Clark, R.
Hornby, Richard
Sharples, Richard


Clark, Henry
Howell, David (Guildford)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Clegg, Walker
Hunt, John
Sinclair Sir George


Cooke, Robert
Hutchison, Michael Clark
Steel, David (Roxburgh)


Cooper-Key, Sir Neill
Iremonger, T. L.
Stodart, Anthony


Costain, A. P.
Irvine, Bryant Godman (Rye)
Taylor, Sir Charles (Eastbourne)


Craddock, Sir Beresford (Spelthorne)
Jenkin, Patrick (Woodford)
Taylor, Frank (Moss Side)


Crosthwaite-Eyre, Sir Oliver
Jennings, J. C. (Burton)
Thorpe, Jeremy


Crouch, David
Joseph, Rt. Hn. Sir Keith
Turton, Rt. Hn. R. H.


Cunningham, Sir Knox
Kirk, Peter
Wainwright, Richard (Colne Valley)


Dance, James
Knight, Mrs. Jill
Walker-Smith, Rt. Hn. Sir Derek


Dean, Paul (Somerset, N.)
McAdden, Sir Stephen
Weatherill, Bernard


Eden, Sir John
Maddan, Martin
Webster, David


Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Maude, Angus
Whitelaw, William


Errington, Sir Eric
Mawby, Ray
Wilson, Geoffrey (Truro)


Farr, John
Maxwell-Hyslop, R. J.
Winstanley, Dr. M. P.


Fisher, Nigel
Mills, Stratton (Belfast, N.)
Wolrige-Gordon, Patrick


Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Mitchell, David (Basingstoke)
Woodnutt, Mark


Gilmour, Ian (Norfolk, C.)
Monro, Hector
Younger, Hn. George


Clover, Sir Douglas
More, Jasper



Goodhart, Philip
Morgan, Geraint (Denbigh)
TELLERS FOR THE NOES:


Goodhew, Victor
Morrison, Charles (Devizes)
Mr. Eyre and Mr. Grant.

Mr. Skeffington: I beg to move Amendment No. 87, in page 62, line 25, to leave out from 'that' to 'was' in line 27 and to insert
in respect of the whole of the land comprised in the project either—
(a) planning permission for the carrying out of material development'.

Mr. Speaker: I suggest that it would be convenient that we should debate,

with this Amendment, Amendment No. 234, in page 62, line 26, to leave out 'authorising' and to insert 'permitting', and Amendments Nos. 235, 236, 237, 238 and 239.

Mr. Skeffington: I suggest that, with your permission, Mr. Speaker, it would also be convenient for us to discuss at the same time Amendments Nos. 88 and


110, which are on virtually the same point.

Mr. Graham Page: On that point, Mr. Speaker, I think that it would be inconvenient to have a debate on Amendment No. 110, although I realise that the subject might be referred to in a debate on these Amendments.

Mr. Speaker: The point has been made. We will not take those together, but stick to the original suggestion.

Sir D. Walker-Smith: For the avoidance of doubt, I presume that it will, of course, be in order to refer to Amendment No. 110, albeit that Amendment is reserved for subsequent individual debate. That is right, is it not, Mr. Speaker?

Mr. Speaker: Hon. Members seem to want it both ways at the moment. They want separate debates, but a joint debate. It will, however, be in order to refer to Amendment No. 110.

Mr. Skeffington: Amendment No. 87 and the other two Amendments to which I referred, and on which discussion will be allowed, are Amendments which are desirable to remove doubt about the interpretation of the words "authorised by planning permission", because they are used in several places in the Bill, as the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) has already discovered. The principal places are Clause 6(3,a), Clause 62(3,a) and, of course, in Clause 67. There have been certain inquiries about the meaning of these words, particularly in connection with Clause 67, with which I will deal first.
We accept that "authorised by planning permission" means that all the necessary planning approvals which might be required under a planning permission have been obtained. However, because there might be some possibility of confusion, the Amendment to Clause 94 will put the definition in relation to Clause 67 beyond doubt by spelling it out clearly. It is quite lengthy, but I think that this makes it clear that the meaning of "authorised by planning permission" is that if there is outline planning permission, either it must itself authorise works or any approval required by the permission must be obtained.
This is the substance of the Amendment. It is now in the definition Clause. While that definition of "authorised by planning permission "was right in regard to Clause 67, it would perhaps be too narrow as regards Clause 62. Its effect in relation to that definition in Clause 62 is that it would be only those builders and developers of residential property who had obtained all the necessary consents under any necessary planning permission before 23rd September, 1965, would have the benefit of exemption which that Clause gives.
This would obviously cut down the exemptions very considerably, in a way which was never intended, and which would be contrary to assurances which have been given from time to time to various bodies. It is unlikely that building firms holding stocks of land which they proposed to use for development in two or more years' time would normally obtain not only outline planning permission but also the necessary detailed approvals under that planning permission.
It has always been my right hon. Friend's intention and the Bill's purpose that the exemptions should apply if only outline planning permission existed on the land. The Amendment to Clause 62 therefore provides that it is sufficient in the context of that Clause—not in relation to Clause 67—for there to be outline planning permission in existence on the land, without any requirement as to subsequent approval of conditions under the planning permission.
Perhaps it might be helpful to the right hon. and learned Member for Hertfordshire, East, who will subsequently move Amendments, if I were to say that, if Amendment 87 were in due course approved by the House, the effect which he intends by his Amendment, No. 235, would be met to that extent. I think that may be helpful to him when he comes to that proposal.

Sir D. Walker-Smith: When putting down my Amendments which are being discussed now together with the Minister's, I was conscious that at first blush there might seem to be something a little semantic in tabling a series of Amendments to substitute the words "permitted" or "permits" for "authorised" or "authorises". That might be the case, were it not for the intricacies and niceties


of the laws of town and country planning. As the House will now appreciate, from what the Parliamentary Secretary has said, this is not a mere point of semantics. It is a point of considerable practical importance—of prime importance, of course, to the second of these Clauses, Clause 67, rather than to Clause 62, and I had in mind the effect of the Minister's Amendment on my Amendments to Clause 62. My Amendments are of primary importance in the context of Clause 67.
It is now clear, as the Parliamentary Secretary has said, that prior to the tabling of these Amendments and counter-Amendments there was doubt as to the position of an outline planning permission in the context of Clause 67—and, indeed, of Clause 62. The hon. Member tabled his Amendment No. 110 to the interpretation Clause—Clause 94—in order, as he says, to remove, a doubt. I have simultaneously tabled my Amendment to remove a doubt, but do so in a different way. Whereas the Parliamentary Secretary is seeking to exclude the benefit of outline planning permission from Clause 67, I am seeking to include it. When I say that he seeks to exclude it, I mean that he seeks to exclude an outline planning permission unless or until it is clothed with full Stage 2 approval.
As its rubric shows, Clause 67 is concerned with projects
… of material development begun but not completed before first appointed day.
At first blush, the Clause looks like an exempting Clause—that is to say, a Clause exempting developers from what would otherwise be the liability to pay the levy—but, in effect, it is not an exempting Clause in its full effect. As hon. Members know, liability to Case C is referred to in Clause 27:
Where the carrying out of a project of material development of the land is begun on or after the first appointed day.
Of course, the converse follows, which is that where material development is begun before the appointed day it is normally exempt from liability to levy under Case C.
The effect of Clause 67, however, with which we are here concerned, is to bring

within liability to Case C separate projects of material development not themselves begun to be carried out before the first appointed day which, apart from Clause 67, might have been taken to be included with a larger projected development which was begun before the first appointed day. In those circumstances, apart from Clause 67, they would have escaped liability to Case C.
That being so, it follows that it is better for a developer with a large incomplete project to be outside Clause 67 altogether; that is to say, to get the whole of his project considered as a single pre-first-appointed-day development. To do that he has to satisfy three requisites which are set out in subsection (1) of Clause 67. The Clause states:
The provisions of this section shall have effect in relation to any project of material development (in this section referred to as 'the larger project') where
and they follow thus:
(a) the carrying out of the project was begun before the first appointed day but is not completed before that day;
(b) one or more specified operations comprised in the project (in this section referred to as 'the existing operations') began before the first appointed day to be carried out on part of the land comprised in the project, but no specified operation has before that day begun to be carried out on the remainder of that land;"—
and then (c)—and this is the one with which we are here primarily concerned:
the carrying out of the project on the remainder of that land is not authorised"—
and that is the word I seek to amend:
by any planning permission in force on that day which authorises any of the existing operations to be carried out.
Therefore, the position under subsection (1,c) is this. If the carrying out of the project on the remainder of the land is authorised by a planning permission in force, the whole project is outside Clause 67 and will rank as a single project begun before the first appointed day and, consequently, will escape liability to the levy under Case C. If, on the other hand, it is not so authorised, it will come within Clause 67, and the remainder of the development will rank as a separate project and will have liability under Case C.
Against that background one has to turn to the Interpretation Clause to see what a developer will have to show to


establish that the carrying out of a project of material development on the remainder of the land is authorised by a planning permission. If Amendment No. 110 be carried—and before you assumed the Chair, Mr. Deputy Speaker, Mr. Speaker ruled that the debate on Amendment No. 110 is reserved, but that reference to its content is in order—and those words be incorporated into the interpretation Clause of the Bill—Clause 94—we get a definition of what is meant by "authorised by planning permission" in these words:
(3) Where for the purposes of any provision of this Act it falls to be determined what development of any land is or was authorised by planning permission at a time when planning permission granted on an outline application (that is to say, an application for planning permission subject to subsequent approval on any matters) is or was in force in respect of that land, any development of that land which at that time—

(a) is or was authorised by that permission without any requirement as to subsequent approval, or
(b) not being so authorised, has or had been approved in the manner applicable to that planning permission,

but no other development, shall for those purposes be taken to be, or (as the case may be) to have been, development authorised by that permission at that time; and any reference in this Act to operations, or the carrying out of a project, authorised by planning permission shall, in relation to planning permission granted on an outline application, be construed in a corresponding way:".
There follows a proviso:
Provided that nothing in this subsection shall affect the operation of section 62 of this Act.
The Parliamentary Secretary referred to that proviso, but there is no such saving proviso in respect of the effect on Clause 67. So the effect of no doubt the prime intention of this Amendment to the interpretation Clause 94 is that outline planning permissions will not count for the purposes of Clause 67 unless and in so far as they have been followed up by full Stage II approval.
8.0 p.m.
The definition of a planning permission granted on an outline application which it is proposed to disregard in these cases for the purposes of exemption from Case C liability goes far beyond the definition in Article V (2) of the General Development Order, 1963. That is a matter on which no doubt the Minister may be

challenged when the debate comes on Amendment No. 110.
What Article V of the General Development Order does in effect is to define an outline planning permission as one subject to subsequent approval of any matters relating to the siting, design or external appearance of the buildings or the means of access thereto. But the definition the House has seen from the words of the Amendment No. 110 which will be in Clause 94 of this Bill, extends to planning permissions subject to subsequent approval of any matter. Therefore, it deserts the well-established framework of Article V of the General Development Order and extends it in that way.
Therefore, the effect is that where there is a planning permission for the development of the remainder of the land but where there is also a condition on that planning permission requiring subsequent approval of any matter—be it large or be it small—and that approval has not been given at the material time, then such development will not under Clause 67, unless it is amended as I have suggested, be classified as authorised by the planning permission.
Consequently, it will be treated as a separate project of development not begun at the first appointed day and will consequently be liable for Case C levy. That is the practical improvement, and a very real practical improvement one would imagine, in the context of developments begun before the appointed day because, as the House will appreciate, developments, especially large-scale developments, are normally carried out in stages and therefore the effect of isolating these projects as being separate projects liable to Case C levy although they are in reality part of a larger project begun before the appointed day, is one which must make a very substantial difference to many developers and impose a considerable penalty upon them.
As I have indicated, the matters which can be reserved for subsequent approval by conditions in an outline planning permission as here defined might be large or they might be very small, but the effect would be the same on both. It is wrong that exemption from or liability to Case C levy should turn on such small matters or fine points.
The primary object of my Amendments is to reverse what now appears to be the


Government's intention—although it was not clear that it was their intention until their Amendments appeared on the Notice Paper. By reversing their apparent intention my Amendments would allow an outline planning permission to govern this question in the context of Clause 67 without the restricting influence on the definition here. It is right that that should be so because the matter of development is outside any principle at the stage of the grant or refusal of an outline application. That being so, that is the better yardstick whereby to make a judgment for the purposes of the liability to Case C levy under Clause 67.
I should perhaps conclude by saying, that being the object of my Amendments, I hope the object is clear. I do not of course have any obstinate pride of draftsmanship in the matter, like any hon. Member who has not got the advantage of Parliamentary draftsmen to assist him. It may very well be that if on reflection the Government felt that the view I have put forward is the better view they could clothe it in better language. I am comforted by the thought that that would make no doubt a useful exercise for the noble Lord who will take the Bill for the Government in another place there to introduce it.
I am not sure, Mr. Deputy Speaker, whether, before sitting down, I should formally move my Amendments, or any of them. I understand not.

Mr. Deputy Speaker: No. This Amendment must be disposed of first.

Mr. Skeffington: I paused before rising because I was not quite certain whether the hon. Member for Crosby (Mr. Graham Page), or some of his hon. Friends, wanted at this stage to intervene. They have put down an Amendment to our proposed Amendment No. 88. I may have some encouraging information to give the hon. Member if he were disposed to move his Amendment, but if he does not do so, or express his intention of doing so, of course I cannot.

Mr. Graham Page: If I may now respond to that and treat the Parliamentary Secretary's remarks as an intervention and not another speech, may I say that the speech of my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) has done a

very great service in drawing the attention of the House, and of the public outside, to what has occurred at this very late stage in the progress of this Bill. Until now developers have thought that the Minister and those who have the conduct of this Bill had intended that outline planning permission was the same as planning permission.
They were justified in believing that because the Bill imports into itself the Town and Country Planning Act, 1962, Section 221, to which I have been referred previously by the Parliamentary Secretary. It is the interpretation Section in that Act and defines "planning permission" as
permission under Part III of this Act, and in construing references to planning permission to develop land or to carry out development of land, or to applications for such permission, regard shall be had to subsection (2) of section twenty of this Act.
That is not material to our present discussions, but Section 20(2) relates to the extension of an existing use of land. Up to now in the Report stage of this Bill developers could rely upon that definition of planning permission because the Bill imported the Town and Country Planning Act into itself. It follows that developers were entitled to rely on Orders made under the 1962 Act, or the Acts which it consolidated.
My right hon. and learned Friend has told the House of the General Development Order made under previous Acts consolidated by the 1962 Act and has referred in particular to Article V of that Order. There is no doubt whatever that developers have been justified in thinking that if they have outline planning permission and if they start developments and carry out a specified operation defined elsewhere in the Bill they will escape the levy. It is obvious from the fact that the Government have considered it necessary to table these Amendments that no longer can we consider outline planning permission as planning permission which will permit a commencement of development before the appointed day and which will let a developer escape from levy.
There must be, not merely one or two developers in the country who have relied on this, but hundreds, possibly thousands, who, because of the discussions in the professional Press, because of letters published in the national Press, and because


of the discussions which took place in Committee, when no clue was given that the developer was to be deprived of what everybody understands as planning permission, although colloquially up to the present it has been called outline planning permission, relied on the position I have referred to.
I cannot help feeling that this is something of a swindle of the public. They have been led to believe that by undertaking certain work with certain permissions before the appointed day levy would not arise. Although it might be an action under Case C, although it might be the commencement of development, provided that it was covered by planning permission it was thought that this "would escape levy. Many people have arranged their business and their development in reliance on that.
Then, a few days before the Bill was due to be considered on Report, there appeared on the Notice Paper Amendments clearly showing that the Minister had changed his mind and intended to deprive those who had arranged their affairs, as they thought properly, so as to escape paying levy, of the benefit of that position. It is something of a confidence trick which has been played on the public.
I should at the beginning of my speech have responded to the Parliamentary Secretary's invitation to state whether we wished to move our Amendment to Government Amendment No. 88. We do so wish.

Mr. Skeffington: My right hon. Friend will be very happy to accept the Amendment to Amendment No. 88. I have already indicated that the Government take the view that, if the House approves Amendment No. 87, Amendment No. 234 is probably unnecessary. My advice is that it certainly would achieve what the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) intends. I hope that he will not feel obliged to press it.
Amendments Nos. 235 to 239 all relate to Clause 67. I do not for a moment dispute the logic of the right hon. and learned Gentleman's argument. Indeed, I support it. However, these Amendments would have the reverse effect of the Government Amendment. My right hon. Friend wishes me to indicate straight away that he could not accept them.
Clause 67 deals with
Projects of material development begun but not completed before the first appointed day "—
that is, where some part of the project has not been started. In that case it has always been accepted in the principle of the Bill that there is no reason why that type of development should not bear levy. It was absolutely right that definite developments either approved or started before the appointed day should be exempt. That has been the intention. It seems to be proper—I hestitate to say so in the presence of such a distinguished practitioner in town and country planning law, as the right hon. and learned Gentleman—but I am advised that there is some doubt whether the use of "permit" could have the effect desired by the right hon. and learned Gentleman. However, perhaps this is a hare I need not start because, as we do not propose to recommend, either here or elsewhere, that these Amendments be accepted, it would be an unnecessary debate upon the legal form.

8.15 p.m.

Sir D. Walker-Smith: My Amendment was necessarily drafted in some haste. My object was to get the point clear, which I succeeded in doing, with the reservation I made as to the draftsmanship.

Mr. Skeffington: The purpose of the right hon. and learned Gentleman's Amendments is quite clear. For the reasons I have stated, the Government cannot advise the House to accept them. It is the Government's view that, were these Amendments to be accepted, they would encourage landowners to flout planning control by finding some way of commencing an operation as a preliminary to obtaining approval of the details of a scheme in order to avoid a levy before the appointed day. This might have far-reaching consequences upon the yield of levy. It would bring another unfairness into the Bill, which is not desirable on any count. For all these reasons, I must advise the House not to accept the Amendments.
Again, I venture to cross words with the right hon. and learned Gentleman. He said, in effect, that, once an outline planning permission has been given, this was the decision to go ahead, or not to go ahead in relation to development. He will know much better than I do that in some cases outline planning permission


can be so vague that it is very difficult to say that this on its own could or ought to be the decision. It may be in the very vaguest and broadest terms, so that no one can take a further decision until either detailed plans are submitted or particular permissions have been sought. It would strain matters to say that, once general outline planning permission is granted, that is a good enough decision in relation to land. In some cases it may be, but the right hon. and learned Gentleman will agree with me that in many cases it would not be.

Sir D. Walker-Smith: Once planning permission has been given in principle on an outline application, up till now—it will be different in future; this is one of the things I criticise about Amendment No. 110 to Clause 94—only those specific matters could be reserved under Article 5 and it was not open to a planning authority to go back on the decision in principle. This is the effect of the case of Hamilton v. West Sussex County Council, a case which the Parliamentary Secretary will know. I cannot recall any case in which, an outline planning permission having been given, agreement was not subsequently reached, assuming that the developer wanted to go on on stage 2 approval.
What I said substantially represents the position and would be accepted as being the position by those who are accustomed to dealing with these matters.

Mr. Skeffington: I put the view that I hold myself as to the character of what I might call an open permission in a number of these cases. But I rest my case much more strongly on the fact that, while we desire to give relief to the project which was genuinely started or intended to be started and which fulfils the conditions in the Clause, and while we wish that to preserve the exemption, we do not want to open the door so wide as would the right hon. and learned Gentleman's subsequent Amendments. I hope that he will feel that he need not move the first of them.

Amendment agreed to.

Amendment proposed: In page 62, line 34, at end insert:
(4) For the purposes of the application of the last preceding subsection to planning permission granted on an outline application (that is to say, an application for planning permission

subject to subsequent approval on any matters) any requirement as to subsequent approval shall be disregarded, whether before 23rd September, 1965, any such approval had been obtained or not.—[Mr. Skeffington.]

Question proposed, That those words be there inserted in the Bill.

Mr. Graham Page: I beg to move, as an Amendment to the proposed Amendment, to leave out from 'disregarded' to the end of the subsection.

Mr. Skeffington: We accept this Amendment.

Amendment to the proposed Amendment agreed to.

Proposed words, as amended, there inserted in the Bill.

Mr. Clegg: I beg to move Amendment No. 222, in page 62, line 35, to leave out from the beginning to the second 'the' in line 38 and insert:
'This section shall not have effect unless before the end of two years from the appointed day.'
It may be for the convenience of the House to consider with it Amendment No. 231, in Schedule 5, in page 112, line 30, to leave out 'six months' and insert 'two years'.
The points in both Amendments are much the same. Both concern exemptions for builders and developers of residential properties and in general we welcome the exemptions. We also welcome the motives which inspire them. However, we do not feel that they go far enough, because it seems that the builder would have to begin his development or claim his exemption within six months of the first appointed day. This may be all very well for the first exemption, that is, for land held before September, 1965. But the situation has changed remarkably since the Bill was first put into draft. Indeed, it has changed again since the second matter, which is the subject of Amendment No. 231, was put into the Fifth Schedule.
Since the Committee first considered these exemptions and welcomed them, although we sought a longer period, there can be little doubt that in past months the starts of new buildings have fallen off. The economy has moved into a stricter phase, and there is ample evidence of this constantly before us in the country and in the House.
When we discussed similar Amendments in Committee the right hon. Gentleman said that what we seek in Amendment 231 was not put in the Fifth Schedule to enable builders to stockpile land, and I presume that that was one of the reasons why he imposed this time limit. But since then the demand for private housing has fallen. Where there is a credit squeeze allied to growing unemployment, the situation is completely different, because the demand for private houses must at all times be related to those who can afford to put down the deposits and pay the mortgages.
We believe that the Minister should be preparing for the situation at the end of the period of strict control of wages and prices next August. It is very unlikely that builders will be able to take advantage of this concession within the six months beginning March, as until the New Year there is an absolute freeze, and thereafter we have the limited freeze of prices and incomes. Therefore, we on this side of the House feel that if the Minister is to get building going again when the economic situation is right, he would be wise to accept the Amendments which enable builders to buy land. They would be ready to go on immediately conditions change and be able to build houses which would be readily saleable. For those reasons I ask the Minister to accept the Amendments.

Mr. Willey: The Amendments are both "Oliver Twist" Amendments. These were two occasions on which I have made concessions, and the second is a concession upon a concession. The hon. Member for North Fylde (Mr. Clegg) now suggests that the period allowed for different purposes should be extended. We can be quite pragmatic about the first: which is the proper period? I am still convinced that the period of six months is right and proper. One must strike a balance in this. The hon. Gentleman has not argued that there are any onerous difficulties in registration, which would be the only argument. It is in the interests of both parties to get this settled as soon as possible, and six months is the right period.
In giving the second concession, one was concerned that small builders should be able to make a contribution to the housing programme. This is why we

took the date of 1st August. The hon. Gentleman will remember that we discussed this in Standing Committee, and then extended it to six months after the appointed day. But it was, of course, effective from 1st August. I have no reason to think that this was not right. Whenever one takes action like that there are suggestions that the period might have been longer, but I have had no official representations about this, and I still believe that the view we took then was right.

Amendment negatived.

Clause 65.—(WHAT IS COMPRISED IN A PROJECT OF MATERIAL DEVELOPMENT.)

Mr. Willey: I beg to move Amendment No. 89, in page 65, line 24, at the beginning to insert:
'Subject to the next following subsection'.
I think that it would be convenient to take, at the same time, Amendment No. 90.

Mr. Deputy Speaker: Yes, if the Opposition have no objection.

Mr. Graham Page: Mr. Graham Page indicated assent.

Mr. Willey: These Amendments are proposed in response to concern which was expressed in Committee. They represent an endeavour to meet it.

Mr. Allason: More in sorrow than in anger, I regret that it has taken such a long time for the Government to accept this point. They did not think of it themselves. It is not a new point, since it appeared in the Rating and Valuation (Apportionment) Act, 1928. The Government have been so keen on their precedents, proudly pointing to them throughout, that they might have looked at that precedent and got this right in the first place.

Amendment agreed to.

Further Amendment made: In page 65, line 27, leave out from 'area' to end of line 29 and insert:
(6) Where any land is on the boundary between two or more rating areas, and accordingly—

(a) different parts of that land form the subject of different entries in the valuation list for the time being in force for those areas respectively, but
(b) if the whole of the land had been in one of those areas, it would have formed


the subject of a single entry in the valuation list for that area,

the Commission may direct that the whole of that land shall be treated for the purposes of the last preceding subsection as if it formed the subject of a single entry in the valuation list for a rating area.
(7) In the application of this section to Scotland, for references to a valuation list and a rating area there shall be substituted respectively references to a valuation roll and a valuation area.—[Mr. Willey.]

Clause 66.—(VARIATION OF PROJECT.)

8.30 p.m.

Mr. Willey: I beg to move Amendment No. 91, in page 66, line 14, to leave out 'entitled' and to insert:

(a) the developing owner in relation to the project, or
(b) entitled (otherwise than as developing owner).

I think that it would meet the convenience of the House, Mr. Deputy Speaker, if we considered at the same time two further Government Amendments, Nos. 92 and 97.

Mr. Deputy Speaker: If that is agreeable to the Opposition.

Mr. Graham Page: Mr. Graham Page indicated assent.

Mr. Willey: These are Amendments which clarify and simplify provisions which were criticised in Standing Committee as not being simple enough.

Mr. Rossi: I thank the Minister for that. We had some discussion in Committee on the subject of Amendment No. 97, and we warned the Minister that he stood in danger of being clobbered by the right hon. Member for Nuneaton (Mr. Cousins) if he persisted with the Clause as it stood. The Clause creates a rather ridiculous result. Any person who begins a material development is liable to a penalty not exceeding £500. Therefore, the very first workman who turns up on the site with his spade and digs the first hole is beginning a material development and, under the Bill as it stood, becomes liable to pay that fine of £500.
The Government are already in sufficient trouble with the trade unions. We tried to spare the Minister dangers of that kind, but he would have none of it. He said it was all nonsense. But we are glad to see that, during the Recess, after, no doubt, being very near to being clobbered by the right hon. Member for

Nuneaton, he has seen discretion as the better part of valour and thought fit to amend the Clause as we urged him to do in the first place.

Amendment agreed to.

Clause 68.—(PROJECT OF MATERIAL DEVELOPMENT BEGUN IN CONTRAVENTION OF S. 38.)

Amendment made: In page 68, fine 7, leave out from 'project' to end of line 14.—[Mr. Willey.]

Clause 70.—(LEVY ON ACQUISITIONS BY COMMISSION.)

Mr. Allason: I beg to move Amendment No. 93, in page 70, line 16, to leave out from 'Act' to the end of line 28 and to insert:
(3) The provisions of Schedule (Assessment of levy on acquisition by Commission) to this Act shall have effect in relation to any such disposition as is mentioned in the last preceding subsection.
(4) Where a notice of assessment of levy served in respect of the compulsory acquisition of an interest in land by the Commission has resulted in an operative assessment of levy.
I am in some difficulty here because this Amendment and the next two Amendments, Amendment No. 94, in page 70, line 39, to leave out from 'Where' to end of line 41 and insert 'a notice of assessment of levy served in respect of the acquisition by the Commission of an interest in land by agreement has resulted in an operative assessment of levy'; and Amendment No. 95, in page 71, line 6, at the end to insert:
(6) If one or more further notices of assessment of levy in respect of the acquisition are served under section 55 of this Act (including that section as applied by Schedule (Assessment of levy on acquisition by Commission) to this Act), or if relief (whether by way of repayment or otherwise) is given or required to be given in respect of the levy in question, any reference in subsection (4)(b) or subsection (5)(b) of this section to the principal amount of the levy in accordance with the assessment shall be construed as a reference to the total principal amount of levy payable in respect of the acquisition as agreed or determined under this Part of this Act.
are all what the Minister would call paving Amendments for a new Schedule.
I take it to be the wish of the House, therefore, that these should be moved formally and that discussion should take place on the new Schedule. I am quite prepared to discuss the new Schedule


now, but, as we have a precedent, we must, presumably, stick to it.

Amendment agreed to.

Further Amendments made: In page 70, line 39, leave out from 'Where' to end of line 41 and insert:
'a notice of assessment of levy served in respect of the acquisition by the Commission of an interest in land by agreement has resulted in an operative assessment of levy'.
In page 71, line 6, at end insert:
(6) If one or more further notices of assessment of levy in respect of the acquisition are served under section 55 of this Act (including that section as applied by Schedule (Assessment of levy on acquisition by Commission) to this Act), or if relief (whether by way of repayment or otherwise) is given or required to be given in respect of the levy in question, any reference in subsection (4)(b) or subsection (5)(b) of this section to the principal amount of the levy in accordance with the assessment shall be construed as a reference to the total principal amount of levy payable in respect of the acquisition as agreed or determined under this Part of this Act.—[Mr. Graham Page.]

Clause 71.—(APPLICATION OF PART III TO MINERALS.)

The following Amendment stood upon the Notice Paper:

In page 71, line 32, at end insert:
'except that Case A and Case B disposals of major minerals only shall not be regarded as chargeable acts or events'.

Mr. Graham Page: On a point of order. I understand that this Amendment, No. 96, goes with Amendment No. 107, Mr. Deputy Speaker, and as there is no one here to move it perhaps it can drop at the moment and return to it when we reach Amendment No. 107.

Mr. Deputy Speaker (Mr. Sydney Irving): That would be appropriate. Amendment No. 96 is not moved.

Clause 75.—(PENALTIES FOR CONTRAVENTION OF S. 38.)

Amendment made: In page 73, line 2, leave out from 'who' to 'shall' in line 4 and insert:
'being the developing owner in relation to a project of material development, or being entitled to a material interest (as defined by section 38 of this Act) in relation to such a project, begins, or causes or permits another person to begin, to carry out the project in contravention of that section'.—[Mr. Willey.]

Clause 76.—(OTHER OFFENCES AND PENALTIES.)

Mr. Rossi: I beg to move Amendment No. 223, in page 73, line 37, at the end to insert 'without reasonable excuse'.
We are now dealing with one of the penalty Clauses of this Bill, and we on this side are anxious that the penalties be kept within reason and be not imposed too drastically or severely on citizens who may wittingly or unwittingly in this particular case find themselves in contravention of the provisions of the Bill.
Clause 76(1) as it stands provides that any person who fails to notify to the Land Commission a dealing with his property that he is obliged under the Bill to notify to the Land Commission, namely, the sale of the freehold of his land, the granting of a lease of seven years or more in length, or who starts any development of his land, who does any of those things and fails to notify the Land Commission that they have been done, then, under Clause 76, he is guilty of an offence and liable to a penalty not exceeding £50.
We can envisage many circumstances in which the person could forget, neglect, omit to send a notification to the Land Commission. It need not even be his own fault that the omission has taken place, because he may leave these matters, the sale of land, the leasing of property, to professional people to deal with for him, and, of course, most citizens do in transactions of these kinds. A slip can occur in the agent's office, and if that slip occurs in the agent's office, without any fault at all of the landowner who is responsible to give notice, then the landowner is liable to a fine not exceeding £50.
We are seeking to mitigate this liability by adding in the words "without reasonable excuse", so that if he has got a reason which stands up—he genuinely did not know the requirement, he forgot about it, or left it to agents who were negligent—he should not be liable to the penalty.
It is necessary, of course, for him to be able to show that he has a reasonable excuse. As matters stand at the moment, if he is prosecuted he has no defence at all, whatever may be the reason for the failure to give the notice to the Land Commission of the sale or the lease


or the starting of the development. There is no defence at all in a court of law to that failure, whatever may be the reason. We suggest he be given a defence, and that the defence be that he has a reasonable excuse for not having done so in the kind of circumstances I have outlined. It is up to him to satisfy the court that that excuse is a genuine one, and he must discharge the burden of proof to the court that it is a proper excuse, and if he has a reasonable excuse, if he satisfies the court, he is not guilty and he is not penalised, but if he cannot satisfy the court, then of course he suffers the penalty as laid down in the Bill, a fine not exceeding £50.
What we think completely wrong is that he is obliged to go to the court without any defence at all, that this is made an absolute offence, even though something can happen without real fault on his part. Therefore we do ask the Minister to accept this Amendment.

8.45 p.m.

Mr. Skeffington: My right hon. Friend is always willing to introduce a modification into a Clause which appears to press unduly on the individual. When I think of all the powerful speeches that I have heard from the hon. Member for Hornsey (Mr. Rossi), I do not think I have heard one before in which the logic of his case was in inverse ratio to the enthusiasm with which he made his speech. If he considers the circumstances of this Amendment, I am sure that as an officer of the Supreme Court he will realise that what he is suggesting is not only impracticable but also in some respects would place on the court a burden which it would find difficult to discharge, and in respect of an obligation which is not at all heavy.
The penalty provision of Clause 76(1) for failure to notify in cases A and B is precisely in accord with Section 28(1) of the Finance Act, 1931. It is based on that model because it is the same form which now has to be submitted—I know the hon. Member for Crosby (Mr. Graham Page) does not like this—when there is a transfer to land. Therefore, this is not an additional form. It is the same form. In fact, I think it is going to be used for capital gains as well. To suggest that this penalty of £50 is a heavy obligation is putting the matter very high indeed.
The hon. Gentleman said that there should be a reasonable excuse and that it would have to be a reason that stood up. How would it stand up? Suppose that under his proposed Amendment I failed to submit a form and I were to say "I forgot". How could that be tested in a court? I suggest that, on a little analysis, the hon. Member will feel that he is pressing this matter too hard. There is no great bureaucratic burden on the citizen. He merely has to send a form. It may be sent by him, his agent or his solicitor, and it is the sort of form which has been in use during the last 36 years. The hon. Member for Crosby says that it has never been any good. Certainly it will be of some good. There will be this one form. I suggest that this is a routine operation performed by all those devoted members of the Supreme Court who look after the interests of their clients so well, and that to suggest that the penalty for failure is excessive is putting the case too high. My right hon. Friend could not possibly accept this Amendment.

Amendment negatived.

Clause 78.—(AVOIDANCE OF CERTAIN CONTRACTUAL PROVISIONS.)

Mr. Graham Page: I beg to move Amendment No. 224, in page 75, line 20, to leave out '21st' and to insert '29th'.
This Clause deals with the avoidance of certain contractual provisions. If I may summarise it, it says that if parties have entered into a contract subsequent to a certain date whereby one who is not properly liable for levy is made liable for it, the whole contract is voided. Take the simple example of the sale of property, an ordinary agreement for sale and purchase. In that agreement, the parties having learned about this levy through White Papers and discussions——

Mr. Costain: Through the Bill.

Mr. Page: Not this Bill. The previous Bill was published only on 21st December, so they could not have known about this from any legislation, or even any prospective legislation.
They draw up a contract between themselves imposing on the purchaser, instead of on the vendor, the liability to pay the levy. I assure the Minister


—and I see other practising solicitors in the House—that I know of contracts, one drawn up in my office in preparation for this Bill, which imposed on the purchaser the liability to pay the levy. Fortunately, that contract was not signed before the vital date. It certainly was not signed afterwards because some weeks later we knew the effect of this Clause. But a date is fixed as the deadline after which any such contract will be wholly void. It is that deadline which I question.
The date is the date on which, not this Bill, but a previous Bill before a previous Parliament was printed—at least that is what is said on the outside of the Bill. I have here a copy of the previous Bill which has printed on the outside "21st December, 1965". The Bill which we are discussing came after a General Election and after a new Parliament and is dated 4th May, 1966. It might have been very reasonable for me to ask for the amendment of the Clause to put in the date of printing of the Bill which we are discussing and not the date of printing of a Bill some months before in a previous Parliament.
But I have been very modest. I have asked for only a very small extension, for this reason. The old Bill may have been printed on 21st December, but I am reliably informed that it was not available to the public in any of Her Majesty's Stationery Offices until 24th December. That was a Friday. It was also Christmas Eve. Therefore, if people did not manage to get into Her Majesty's Stationery Office during the afternoon of Friday, Christmas Eve, the 24th, they did not know all over Christmas weekend what was in the Bill. The public could not have known on 21st December because the Bill was not available for them in the place in which they would look for it. They might have asked a Member of Parliament to get it from the Vote Office. But which member of the public would seek to get Bills on the cheap in that way? If anybody is capable, not only of buying Bills on the afternoon of Christmas Eve, but of reading them——

Mr. Rippon: And this one at that.

Mr. Page: And this one, too—then good luck to him.
One must assume, in common sense, that members of the public did not know about this Bill before Christmas. They certainly would not read it over Christmas weekend. Christmas Day was on a Saturday. Then there came Sunday, which was not Boxing Day, because, as the Minister knows, if Sunday follows Christmas Day we have Boxing Day on the Monday. It was therefore impossible to get a copy of the Bill from the Stationery Office on the Monday. So I have given a space of just over a week from the date on which it was supposed to be available to the public to the date when somebody might reasonably have got hold of a copy of the Bill and read it.
I may have put this matter facetiously, but it is of some seriousness, because if anybody signed a contract during that period not only is the offending Clause, making someone pay the levy who is not liable for it, cut out of the contract; the whole contract becomes void. I think that I read the Clause correctly.
This is an assumption by the Minister, and it is too often an assumption by the House itself, that the public knows what is going on here immediately it happens. That is not the fact. The public cannot possibly read all the Bills we produce immediately they are printed and available in the Vote Office. We do not do so ourselves, and we cannot expect the public to do so. The public may be acting to its prejudice, as any person would have been acting to his prejudice, in signing such a contract without knowing what was contained in the Bill.
I ask the Minister on this occasion to look at the matter from a practical point of view and not simply to stick to precedent and what is printed in the Bill. All that the right hon. Gentleman has done in the new Bill is to copy a Clause and the date from the old Bill. I have given a practical date on which someone might reasonably have known what was included in the new Bill and have ordered his business to comply with it.

Mr. Willey: I do not entirely accept the chronological account given by the hon. Member for Crosby (Mr. Graham Page), but I would be entirely insensitive if I did not respond to such a powerful plea. I must say at once that we accept the Amendment.

Amendment agreed to.

Clause 80.—(INTERPRETATION OF PART III.)

Amendment made: In page 76, line 44, at end insert:
'the relevant Schedules' means Schedules 4, 5, 7, (Allowance in respect of estate duty), (Deductions from levy in respect of capital gains tax and corporation tax), 8, (Credit carried forward from previous chargeable act or event) and 9 to this Act and includes any regulations made under any of those Schedules.—[Mr. Willey.]

Mr. Baker: I beg to move Amendment No. 244, in page 78, line 23, after 'to', to insert 'a security constituted by'.
Throughout these debates, a number of my right hon. and hon. Friends have stressed that neither the Law Officers nor the Chancellor have been present and that in many ways this has held up our debates. I think it only courteous to point out that the Under-Secretary of State for Scotland has been assiduous in his attention here in looking after the interests of Scotland, together with myself. I therefore hope that as the hon. Gentleman was so good as to seek to accept, in principle at least, some of the former Amendments which I moved on behalf of my hon. Friends, he will see his way to accepting this one.
If we examine subsection (7) of the Clause, we find that the Bill assumes that an ex facie absolute disposition automatically involves a debtor-creditor relationship. In other words, the subsection assumes that there is in existence a heritable security. This is not by any means the only case.
9.0 p.m.
The position arises equally when heritable land is held in or on trust. In addition, in any straightforward transaction with no question of loan or mortgage arising, the disposition is ex facie an absolute one.
My Amendment seeks to clarify the intention of subsection (7) of Clause 80 of the Bill.

The Under-Secretary of State for Scotland (Dr. J. Dickson Mabon): This is an acceptable Amendment to the Government which clarifies the intention.

Amendment agreed to.

Further Amendment made: In page 78, line 29, leave out 'Schedules 4 to 9' and insert:

'the relevant Schedules and Schedules (Assessment of levy on acquisition by Commission) and (Death, bankruptcy, winding up and floating charges)'.—[Mr. Willey.]

Clause 84.—(SUPPLEMENTARY PROVISIONS AS TO RIGHTS OF ENTRY.)

Mr. Willey: I beg to move Amendment No. 100, in page 79, line 37, leave out 'before so entering'.
The Amendment fulfils an undertaking which I gave in Standing Committee to amend the Clause so that anyone entering land would have to show not only before he entered the land but also while he was on the land that he was authorised by the Commission or that he was an officer of the Valuation Office, as the case may be.

Amendment agreed to.

Mr. Willey: I beg to move Amendment No. 101, in line 40, leave out 'twenty-four hours' and insert 'seven days'.
This fulfils an undertaking which I gave in Standing Committee that the period of the notice ought to be extended from 24 hours to seven days.

Mr. Graham Page: This is a most acceptable Amendment. If I might pick the Minister up, it is not quite as he suggested. As I understand it, entry can be made, but a demand for entry as of right cannot be made. I wonder if this is not a little contrary to the previous Clause, where a person duly authorised in writing by the Commission may at any reasonable time enter upon the land. I should have thought that one ought to make that subject to the new Amendment to Clause 84, but no doubt the Minister will look at that, as it is a matter of drafting. On the merits, it is a most acceptable Amendment to this side of the House.

Amendment agreed to.

Mr. Allason: I beg to move Amendment No. 233, in page 80, line 13, leave out 'any land is damaged' and insert 'damage occurs'.
As the Clause is drawn at present, only damage done to the land has to be paid for. Under the Clause, as the right hon. Gentleman has explained, officials of the Land Commission can enter into land and can undertake very considerable activity in there. The Commission


can bore for oil, search for minerals, prospect in every sort of way, and its officials will probably find themselves trampling down hedges, releasing livestock and committing a great number of uncountryman-like acts which are always liable to be done by people who are not particularly used to the countryside. In these circumstances, as we explained in Committee, it seems pretty unsatisfactory if only the actual physical damage to the land is to be paid for.
Other types of damage might be quite considerable. There may, for example, be interference with trade. If boring for oil is taking place on the forecourt of a shop, it will not be very helpful to the trade of that shop. Once the paving stones have been replaced at the end of the operation, the physical damage will have been put right, but not the damage to the shopkeeper's books.
When one thinks about farming, one realises that there may be considerable damage to the movement of livestock, and damage through the carrying of disease because of failure to take the necessary precautions, and various other forms of damage may occur.
Difficult problems may arise with regard to rights of way. If the normal entrance to a dwelling-house, or to a factory, or to a farm, is interfered with, life is made intolerable, and yet if the physical damage is put right, apparently this is all that the Clause is intended to cater for.
The Minister was very reasonable in Committee. He said:
Notwithstanding the difficulties, I am prepared to reconsider the position. I do not want to accept the Amendments as they stand, for reasons I have given, but I accept them in principle."—[OFFICIAL REPORT, Standing Committee E, 2nd August, 1966; c. 817.]
I hope, therefore, that the Minister will accept the Amendment, because he certainly gave us to understand that it was his intention to do so.

Mr. Willey: As the hon. Gentleman said, we discussed this matter in Committee. I was not unsympathetic, and did not quarrel with the general trend of the argument put forward by Members of the Opposition. I do not, however, propose to accept the Amendment, and perhaps I might tell the House why.
First, from the inquiries which I have made—this is not the substantial reason, but this seriously affects how one should regard the matter—I have had no criticism of the effect of the present provisions. Secondly, this is part of the general law. The most recent precedent is the Town and Country Planning Act, 1962, and one must hesitate, if one is changing the general law, before taking any actions. I have taken note of the discussion which we had in Committee upstairs, but this must be considered when there is a question of the general provisions.

Mr. Allason: Perhaps I might have the leave of the House to speak again.
The right hon. Gentleman's reply seems to leave the matter in an unsatisfactory position. I take it that the right hon. Gentleman is saying that resort must be had to common law on every occasion when damage occurs. Clearly there is that possibility, but it means that the Commission will have to be sued. Is this really what the right hon. Gentleman wants?
If the right hon. Gentleman has consulted various bodies, and if the N.F.U. and the C.L.A. have read our discussions in Committee, I shall be surprised to learn that they are sastisfied with the Bill. Either they have not read the report of our discussions or the Minister has been even more persuasive with them than he has been with us. I ask him to think again about this.

Mr. Willey: I have not been persuasive; I am a rapporteur. I am saying that this is a situation in which we must consider the general provisions, and we feel that we cannot alter the situation in this case without considering the general position. This point has been raised in connection with other matters—for instance, in our discussions about compulsory purchase.

Amendment negatived.

Clause 89.—(POWER TO REQUIRE INFORMATION AS TO OWNERSHIP OF INTERESTS IN LAND.)

Mr. Willey: I beg to move Amendment No. 102, in page 82, line 30, after 'fails', to insert 'without reasonable excuse'.
Again, this fulfils an undertaking that I gave in Committee.

Amendment agreed to.

Mr. Allason: I beg to move Amendment No. 229, in page 82, line 33, at the end to insert:
(3) It shall be a reasonable excuse under the last preceding subsection that the information was acquired by the person so required to give it in the course of acting as a solicitor.
I am glad that Amendment No. 102 has been accepted, inserting the words "without reasonable excuse". This is a step in the right direction for the protection of communications between solicitor and client. But we feel that it is necessary to go a little further, and that is the purpose of the Amendment. Communications between solicitor and client should be frank. I am not speaking as a member of the legal profession. This is in the interests of the client rather than the solicitor, because the whole object of the solicitor's life is to serve his client. It is essential that the client's interest should be properly served, but how can a solicitor act for a client if the client, in turn, cannot be frank with him?
If the solicitor tells his client, "You tell me all the facts of the case, but I have to warn you that I am subject to be subpoenaed in order to explain to the other side the facts that you have given me". In that case the client may well say, "This is a rum sort of do. I am not sure how much I can tell my solicitor", and he may well leave the reputable solicitor who has told him that and go to someone else who is able to assure him that he can give him some useful advice when he is not qualified to give it. That is thoroughly unsatisfactory. It is necessary to ensure that the claim that a solicitor should disclose his client's affairs should not be supported
This principle is well recognised in the case of Crown privilege. It is well known that if all the communications between civil servants were liable to examination in public they would all go below the counter. Instead of files being properly minuted and passed round there would be little scraps of paper with the words, "Destroy this after reading", on them, which would later find their way into the wastepaper baskets, and perhaps afterwards into the Sunday Press. It is clear that there should be privilege so as to have free discussion. It therefore seems necessary to make this Amendment to ensure that a solicitor cannot be compelled to disclose the private affairs of

his client if that client does not consent to their disclosure.

9.15 p.m.

Mr. Skeffington: We had a very interesting discussion in Committee when a similar Amendment was moved to make it clear that professional privilege was not breached by a solicitor being forced to disclose confidential information about his client's affairs. My right hon. Friend agreed to look at this matter further, which he has done, and I think that he wrote to the hon. Member for Crosby (Mr. Graham Page) on 24th October.
I ought, first, in fairness, to point out—members of the Supreme Court will know this—that there is provision in the Town and Country Planning Act, Section 215 (2), which is of much more ancient lineage than that, which deals with this very point:
Any person who, having been required in pursuance of this section to give any information, fails to give that information, or knowingly makes any misstatement in respect thereof, shall be liable on summary conviction to a fine not exceeding five pounds.
Of course, the previous part deals precisely with a relationship of this kind and with matters of this kind.
The Amendment was withdrawn on the undertaking that we would consider this matter further. We are advised that the effect of the Amendment would be that the solicitor receiving directly rent for his principal, who receives it indirectly, would have to make disclosure. He would say that he had no interest in the land, but that his client had an interest, the nature of which he would specify. But all the solicitor need tell the Commission is the name of the person on whose behalf he receives the rent and to whom he accounts for the rent. The Commission could then seek the information from the principal as being the person who is receiving the rent—indirectly—for the land. If the matter is approached in this way, disclosure can be required by the solicitor of his clients' affairs.
The Amendment is, therefore, unnecessary and would depart from the precedent of Section 215, which has not been a subject of dispute between the profession and the authorities. For these reasons, I hope that the Amendment will not be pressed.

Amendment negatived.

Clause 90.—(DISCLOSURE OF INFORMATION BY INLAND REVENUE.)

Sir D. Walker-Smith: I beg to move Amendment No. 242, in page 83, line 2, to leave out 'whether before or'.
I move the Amendment in a spirit of inquiry and not of hostile intent and to elucidate some clarification on why it is necessary to put this in such wide terms in this subsection of Clause 90. Under Clause 90(1), the Inland Revenue is permitted, in spite of obligations of secrecy, to make disclosure to the Commission for the purpose of facilitating the performance of any of its functions of the contents of any document to which the Clause applies.
Subsection (2) deals with the question of to what documents it applies in these terms:
This section applies to any document which, having (whether before or after the passing of this Act) been produced to the Commissioners of Inland Revenue in pursuance of Section 28 of the Finance Act, 1931 or furnished to them in pursuance of Schedule 2 to that Act, is for the time being in their possession or under their control.
Section 28 of the Finance Act, 1931 applies, in substance, to documents in relation to the transfer on sale of the fee simple of land, to the grant of any lease of land for term of seven years or more and to any transfer on sale of any such lease.
Those documents have presumably, under Section 28, been made available to the Inland Revenue in compliance with that statutory provision since 1931. It is, of course, quite proper in principle that, if the Commission, for the purposes of its statutory duties, needs such documents, they should be made available by the Inland Revenue. That seems proper and appropriate. What, at the moment, I am not clear about is in what way the Land Commission can be concerned with documents of this sort going back as far as 1931.
The Land Commission will, presumably, be concerned, where it is concerned with such documents, with them in the context of calculating base value. I do not see what other purpose it could have. In the calculation of base value, the relevant Schedule for this purpose is, presumably, Schedule 5. That, as the House is aware, is the Schedule which deals with
Base Value Derived From Previous Disposition.

It defines a relevant disposition for this purpose and relevant previous disposition in these terms:
3. For the purposes of this Part of this Schedule a previous disposition of the charge able interest shall (subject to paragraphs 4 and 5 of this Schedule) be taken to have been a relevant disposition of that interest if it was a disposition for valuable consideration under which the chargeable owner or a predecessor in title of his became entitled to the chargeable interest, and either—

(a) it was a disposition falling within the antecedent period, or
(b) it was made on or after the first appointed day and constituted a chargeable act or event…"

Obviously, we are not concerned here with (b), which refers to after the appointed day, because we are thinking in terms of 1931 or thereabouts.
Presumably, therefore, we have to consider what is the antecedent period referred to in paragraph 3(a) of Schedule 5. To find out what that is we go to paragraph 2(2), which states:
In this Part of this Schedule "disposition falling within the antecedent period" means a disposition which either—

(a) was made within the period beginning on 1st July 1948 and ending with 22nd September 1965, or
(b) was made after the end of that period…"

Again, we are not concerned with (b) because that is after the end of that period. So we now seem to have brought ourselves within the relatively narrow ambit of 1st July, 1948 and 22nd September, 1965.
Unless the right hon. Gentleman has some other provision in this long and complex Measure to refer to, that seems to leave an unexplained gap of 17 years from 1931 to 1948. The year 1948 would seem to be a reasonable terminus a quo for this matter, because the Minister and the House will be aware that 1st July, 1948 was the appointed day under the Town and Country Planning Act, 1947. One can see that it may be necessary to go back that far to 1931. A lot of interesting things happened in 1931, including the General Election which showed the sound political judgment of this people in a very commendable and striking way. Apart from any nostalgic satisfaction that may bring to the right hon. Gentleman, can he please explain the significance of 1931, and bridge the gap between then and 1948?

Mr. Willey: My intelligence had just led me to where the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) was leading me, that the relevant date is 1st July, 1948. I was so informed. I accept all that the right hon. and learned Member said. I can only say that, whether before or after, it enables us to go back to the 1st July, 1948.

Amendment negatived.

Clause 93.—(REGULATIONS AND ORDERS.)

Mr. Skeffington: I beg to move Amendment No. 103, in page 84, line 33 to leave out 'section' and to insert:
'sections (Levy in Case F) and'.
With your permission, Mr. Speaker and the agreement of the House, perhaps I may be allowed to speak also to the following Amendments:

Amendment No. 105, in page 84, line 37 to leave out' 71' and to insert:
'(Levy in Case F) or made for the purposes of section 71 or section 94(2)'.

Amendment No. 111, in Clause 94, page 87, line 8 at the end to insert:
(9) Regulations made for the purposes of subsection (2) of this section shall be of no effect unless they are approved by a resolution of each House of Parliament.

Mr. Speaker: If the Opposition have no objection.

Mr. Skeffington: These Amendments fulfil an undertaking given in Committee, which may be found reported at column 828, to make the regulations dealing with Case F cases, and thus defining non-material development, subject to affirmative Resolution. This was the desire of the Opposition.

Mr. Graham Page: I am not certain from yesterday's debates whether we have discussed Case F or not, or whether it comes into a Schedule. In fact, I am in some confusion with Clause 35 being taken in and out of the Bill and a new Case F being presented to us.
It is right, however, that if there are to be new cases which attract levy the circumstances under which they attract levy should be brought before the House. Amendment No. 111 says:
'Regulations made for the purposes of subsection (2) of this section shall be of no effect unless they are approved by a resolution of each House of Parliament.'

This is one form of bringing regulations before the House. Perhaps a better form would have been to bring them in draft before they are made. Under this form the regulations are made and then await an affirmative Resolution of the House, which means that the House must say yea or nay to the regulations as a whole. When a draft is brought before the House for approval before regulations are made, there is at least a chance for the Minister to present them to take account of the debate, perhaps to amend them, and later another draft may be presented without his losing face.
I should certainly have preferred the form of a draft being brought before the House in this case, which is going to be a complicated matter for the House to consider, before the Order was made. To that extent I think the Minister has gone a little wrong, but he has gone a long way to satisfy our demands.

Amendment agreed to.

Mr. Skeffington: I beg to move Amendment No. 104, in page 84, line 33, to leave out '8' and to insert:
'(Deductions from levy in respect of capital gains tax and corporation tax)'.
This is a drafting Amendment to take account of the new Schedule to which it refers.

Amendment agreed to.

Amendment made: In page 84, line 37, leave out '71' and insert:
'(Levy in Case F) or made for the purposes of section 71 or section 94(2)'.—[Mr. Willey.]

Clause 94.—(INTERPRETATION.)

Amendment proposed: In page 85, line 26, leave out from 'grant' to 'conveyance' in line 28 and insert:
'of a tenancy, the renewal, extension or other variation of a tenancy, and any other'.—[Mr. Willey.]

9.30 p.m.

Mr. Allason: I do not think we discussed this Amendment when we discussed new Clause 6. It demonstrates the unsatisfactory nature of the Government's refusal to discuss linking Amendments. The Amendment permits new Clause 6 to make sense, which it did not do when we approved it. New Clause 6 speaks of dispositions varying terms and conditions of tenancy. Here we legislate that a


variation of tenancy shall be a disposition. What a way to run a railroad!

Amendment agreed to.

Mr. Farr: I beg to move Amendment No. 107, in page 85, line 31, at the end to insert:
'major minerals' means all minerals other than sand, gravel and clay
Would it be convenient if with this Amendment we discuss the closely related Amendment No. 96, in page 71, line 32, at the end insert:
'except that Case A and Case B disposals of major mineral only shall not be regarded as chargeable acts or events'.

Mr. Speaker: If the House so wishes.

Mr. Farr: The purpose of the Amendments is to exempt from Case A and Case B levy disposals of all minerals other than sand, gravel and clay. About the only purpose of the Bill with which some of us on this side find a measure of agreement is the intent to ensure that a proportion of any betterment which accrues is returned to the nation. Where land is made more valuable by nearby development, there is something to be said for this aim. The same can be said of sand, gravel and clay deposits, because as houses creep nearer and development gets closer and closer, so to some extent do these three deposits become more desirable and more valuable.
The same does not apply to major minerals. Their value is not increased by the proximity of any development which may be envisaged or which may be taking place. Those of us on this side of the House who have studied this point consider it very unfair that Case A and Case B disposals of minerals should attract levy in this instance which often could be payable years before any royalties are received.
If the Amendment is not accepted, mineral owners could in some cases find themselves in the invidious position of finding it more profitable not to have their minerals operated. The margin upon which some mineral owners are operating at the moment is very slight. For instance, a mineral owner in Northamptonshire is now selling ironstone at 2½d. per ton only, of which l½d. goes straightaway into a restoration fund. The balance is taxed at Income Tax rates. If, in addition, a levy is to be payable at some

stage in this procedure, it will be a very great burden indeed upon mineral owners and will make them even more inclined than they are at present to leave their minerals in the ground. I move the Amendment to draw the attention of the House to what we consider to be an injustice and hope that the Minister will correct it.

Mr. Willey: The hon. Gentleman will appreciate that I have heard the general argument before. He has used the Amendment again as a peg for that general argument, and the trouble about that is that he is not pursuing the general argument but a line of demarcation which would be impossible to justify. It would not be a consistent or reasonable line of demarcation, and for that reason alone it would be impossible to accept the Amendment.

Amendment negatived.

Mr. Willey: I beg to move Amendment No. 108, in page 86, line 12, to leave out from the first 'of' to the first 'of' in line 13 and insert 'paragraphs 1,2,3 and 5 to 8'.
It might be for the convenience of the House if we discuss with it Amendment No. 109.
The Amendments arise because of the unsatisfactory nature of paragraph (4). We are getting rid of paragraph (4) and leaving farm buildings to be dealt with by Regulations. The detailed wording of the Regulations will be discussed with the National Farmers' Union and the Country Landowners' Association, both of which favour the action we are taking here.

Mr. Graham Page: This introduces into the Bill a new definition by regulation. It is all very well for the Minister to say that somebody outside the House has agreed this with him and will agree the regulations with him, but I am always a little suspicious of this going on outside the House and the regulations being brought before the House as a fait accompli.
I should have been happier if the Minister, in proposing the Amendment, had given us some indication of what the definition will be. For all we know it could be something completely strange to us. When an Order comes before the House for approval, or in this case,


merely for annulment if any hon. Member sees fit to pray against it, then it is something of a fait accompli. The Minister could have indicated a little more what was in mind, what was to come into the regulations by way of new definitions.

Mr. Willey: I am not surprised to hear what the hon. Member has said. I think that if I were in his place I might well have said the same thing. But there are difficulties about this. I am not in a position to indicate what might be in the regulations, because they are being discussed with the N.F.U., and I hope that the hon. Gentleman will accept my assurance that those affected feel that paragraph (4) is so unsatisfactory that this is the best way to deal with it.

Amendment agreed to.

Further Amendment made: In page 86, line 16 leave out from 'within' to 'II' in line 17 and insert:
'Part I, or within paragraph 1 or any of paragraphs 3 to 7 of Part'.—[Mr. Willey.]

Amendment proposed: In page 86, line 27, at end insert:
(3) Where for the purposes of any provision of this Act it falls to be determined what development of any land is or was authorised by planning permission at a time when planning permission granted on an outline application (that is to say, an application for planning permission subject to subsequent approval on any matters) is or was in force in respect of that land, any development of that land which at that time—

(a) is or was authorised by that permission without any requirement or as subsequent approval, or
(b) not being so authorised, has or had been approved in the manner applicable to that planning permission,

but no other development, shall for those purposes be taken to be, or (as the case maybe) to have been, development authorised by that permission at that time; and any reference in this Act to operations, or the carrying out of a project, authorised by planning permission shall, in relation to planning permission granted on an outline application, be construed in a corresponding way:
Provided that nothing in this subsection shall affect the operation of section 62 of this Act.—[Mr. Skeffington.]

Mr. Graham Page: This is absolutely shocking and preposterous—one of the most amazing Amendments on the Notice Paper and it has not been explained to the House.

Mr. Skeffington: I hope that the hon. Gentleman will restrain his indignation.

Mr. Page: No, I cannot.

Mr. Skeffington: I have formally moved the Amendment now. I referred to it at some length in our discussion on Amendment No. 88. Now that I have moved the Amendment, there is no reason why the hon. Gentleman should not speak further, and I shall be delighted to answer him. The matter is really for the hon. Gentleman.

Mr. Page: But when this subject was touched upon on previous Amendments, we reserved this Amendment for later debate. I thought that the Parliamentary Secretary would at least explain why it appears on the Notice Paper at this very late stage, making a complete change in the intentions as I and many members of the public understood them previously. If the hon. Gentleman will not explain the effect of this Amendment, I shall have to do it for him

Mr. Skeffington: No, that is not right. I explained this extensively, and it is quite unfair of the hon. Gentleman to mislead the House in that way. I took the three Amendments together, and I spent a considerable time in showing exactly how this affected the relevant Clause.

Mr. Page: I listened to that debate patiently and I took part in it at one stage, but I did not hear the Parliamentary Secretary explain the purport of this Amendment. It introduces into the Bill an entirely new definition of planning permission, something which the public has not understood previously and which is quite contrary to expressions of opinion in the national and professional Press and from the Department itself.
The cases are defined in Clause 27. Case C has this definition:
Where the carrying out of a project of material development of the land is begun on or after the first appointed day.
If a project of material development is begun after the appointed day, it attracts the levy. If carried out before the appointed day, it does not attract the levy.
In order to ascertain what a project of material development is, one turns to


Clause 64, where it is defined as a project begun when a specified operation is carried out, and in Clause 64(3) the specified operations are enumerated:

"(a) any work of construction in the course of the erection of a building;
(b) the digging of a trench which is to contain the foundations, or part of the foundations, of a building;
(c) the laying of any undergroudn main or pipe to the foundations, or part of the foundations, of a building or to any such trench as is mentioned in the last preceding paragraph;
(d) any operation in the course of laying out or constructing a road or part of a road;
(e) any change in the use of any land, where that change constitutes material development."

If any of those specified operations are undertaken before the appointed day, a project of material development has begun before the appointed day, and, provided that one can then discover the extent of the project, the developing owner escapes the levy because he started development before the appointed day.
Put baldly like that, it may be thought to draw a fictitious line so that it really does not matter morally whether a man starts a project before or after the appointed day. But, as I understand it, the reason for this provision was that, having announced the whole monstrous business of a Land Commission taking a betterment levy, the Government feared that building operations would dry up. Therefore, it was made clear by the terms of the Bill and by public statements issuing from the Ministry that developers should continue with their development, the idea being that, if they undertook development between 23rd September, 1965, when the White Paper showed the Government's intentions, and the appointed day, on the Bill becoming law, there should be no drying up of building operations at that time.
9.45 p.m.
So it was made well known that builders should continue their developments and need not fear retrospective legislation if they started their developments before the appointed day, which would be announced under the Bill. We were in doubt for some time as to what would be the appointed day but the Minister vouchsafed that to us in Committee as being 1st March, 1967. That was

announced some months ago, so builders and developers have known for some time that, if they started a specified operation as defined in Clause 64, they were then starting a project of material development and would not have to pay the levy under Case C in respect of that project.
One then has to discover what is the project. One turns to Clause 67, and even if one did not, one would have to find what planning permission the developer had to carry out the project. But Clause 67—" Projects of material development begun but not completed before first appointed day "—clearly sets out that the developer must have his planning permission if he is to start the specified operation.
Then, by reference to the planning permission, one can find out what project he is starting. If he is digging the foundations for one house and he only has planning permission for one house, that is the project. If he is digging the foundations for one house but has planning permission to produce an estate of houses and the digging is part of the permission, then it is part of the project and the planning permission has been a sort of judgment of what the project must be. This is where we come up against the Amendment. I am sorry if I have spent so much time on its introduction, but developers have understood that the planning permission in this context includes outline planning permission—the permission granted without specifying the elevation of buildings, the outline of the development.
Developers have relied upon the definition of planning permission under the Town and Country Planning Act, 1962, defined in more detail in the General Development Order. Outline planning permission is defined in the Town and Country Planning General Development Order, 1963—Statutory Instrument No. 709—which states, in Article 5(2):
Where an applicant so desires, an application, expressed to be an outline application, may be made under the preceding paragraph for permission for the erection of any buildings subject to the subsequent approval of the authority with respect to any matters relating to the siting, design or external appearance of the buildings, or the means of access thereto, in which case particulars and plans …
So it is specifically stated in the Order how far an outline planning permission


goes and what can be reserved, and only those items stated in that paragraph can be reserved for further consideration by the planning authority.
But the outline planning permission itself is permission for development and is permission to read it into the Land Commission Bill's permission for a project of material development. What normally happens on an outline planning permission is that the local planning authority will give permission for so many houses in a certain position. It may go further and accept an outline of sites and roads to the estate. This is very normal, and if, in pursuance of that, roads are laid down, sewers are laid, that is a specified operation under the provisions of Clause 64 of the Bill.
Reliance has always been on the fact that outline planning permission has always been understood as being planning permission, and to qualify it merely by the word "outline" means there are certain further particulars to be supplied to the local authority on reliance on that many developers, many ordinary builders providing homes for the people, building their houses, have started developments in this period before the appointed day. They have made all their plans for it. Factory owners have made plans for the extension of their factories. In innumerable ways people have relied upon this fact that if they—as colloquially it has been said—dig a trench before the appointed day as part of the project for which they have outline planning permission they are relieved of the levy.
It is not quite digging a trench. It must be to contain the foundations or part of the foundations of a building. But that has been the phrase, and the fact that this has come to be a colloquial phrase like this among builders and among estate agents and among valuers and among solicitors and so on shows that it has been universally accepted that outline planning permission was what was required.
Now, a few days before Report stage, Amendment No. 110 appeared on the Notice Paper, and gave us an entirely new definition of planning permission. This cuts out outline planning permission as being something which will authorise the start of specified operations. I described this, on a previous Amendment to Clause 67 and the case put by my right

hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) as something of a confidence trick. Really, whether the Minister has himself misled the public, I cannot help feeling he has allowed the public to be misled on this, and to introduce this definition of planning permission at this stage is most unfair to the public.

Mr. Skeffington: I think, with respect, that sometimes when the hon. Gentleman the Member for Crosby (Mr. Graham Page) is on to a very good point he destroys it by grotesque exaggeration. A good deal of what he said in the last part of his speech is, I suggest, of that nature. It is all very well for him to say what he thinks people understand by outline planning permission, but the fact is that the definition we have used in Amendment No. 110 is identical with the definition which has already appeared for a number of years—in the Land Compensation Act, 1961, and the Control of Office & Industrial Development Act, 1965. To suggest that it is something of a new definition and quite unkown is just not so.
Furthermore, when I spoke to the Amendment I made it absolutely clear—indeed, I think the hon. Gentleman will himself remember, if he recalls some of the debates we had in Committee—that not only my right hon. Friend and I but also the Department, upon any of the inquiries which we received as to what this term "authorised by planning permission" meant, have always said that it means that any necessary planning approvals which might be required under the planning permission have been obtained.
However, at this stage, so that there should be no doubt about this, and to prevent the possibility of confusion in Clause 94, we have made the Amendment. It merely carries out the definition and explanations we have always given, and which, indeed, are in other Statutes.
This definition divides itself into two parts. Outline planning permission must have authorised the works, and any approval required under the permission must have been obtained. I have said all this before, and I cannot understand the indignation of the hon. Gentleman, which does seem to be a little beside the point.
A point was raised by the right hon. and learned Gentleman the Member for Hertfordshire, East (Sir D. Walker-Smith) about Article 5 of the General Development Order. He was suggesting that in Article 5 outline planning permission is granted subject to conditions in respect of a certain range of matters to which the hon. Gentleman has just referred. The right hon. and learned Gentleman argued that the Government Amendment, referring to "any matters", was different. That is true, but the definition is in other statutes. The definition in Amendment No. 110 is that a development which could be begun without being in conflict with the terms and conditions of a planning permission should be the only one that is acceptable. It may not be precisely the same, but to this extent I suppose the developer has an advantage.
As I say, there are reasonable precedents, and I hope that in view of the explanation, the House will feel that no great change has occurred. We have prevented confusion by ensuring that these matters are clearly defined in the definition Clause.

Mr. Rippon: Does not the Parliamentary Secretary understand that while there might have been some justification for this definition if it had been put in the Bill at the outset, he cannot justify it tonight by saying that it is a form of words which have been used somewhere else before? The fact that this definition has been omitted from the Bill has induced people to have an entirely different impression. Nobody knows what letters the Minister may have written trying to explain what he thought was the intention of the Bill.
My hon. Friend the Member for Crosby (Mr. Graham Page) is right in saying that people have assumed that because the definition was not in the Bill originally, it does not apply. They know the alternative definitions which are available, but we cannot say that this Amendment helps to remove confusion. What would remove confusion would be to withdraw the Amendment and leave the position as it was before, on which people have acted.

Sir D. Walker-Smith: I do not want to prolong matters by adding more than a brief word or two, more particularly as I deployed what I understand to be

the position in connection with the earlier Amendments in the context of Clause 67. However, I do not find the further explanation of the Parliamentary Secretary reassuring or convincing.
The Parliamentary Secretary now says that the words in Amendment No. 110 are to be found in the Land Compensation Act, and he relies on that fact. Surely the position is this. Either the definition in the Land Compensation Act is in pari materia with the present Bill, in which case the fact that the definition was not reproduced in this Bill would lead people to assume that it was not to be incorporated here; or it is not in pari materia with the Bill, in which case the argument does not take the hon. Gentleman anywhere in any event. Therefore, I do not think that it adds powerfully to what is at best a flimsy case.
There are two points here. The first point is the injustice of changing this thing at the last moment, when people have acted in reliance on another impression. That point has been fully and forcibly dealt with by my hon. Friend the Member for Crosby (Mr. Graham Page) and by my right hon. and learned Friend the Member for Hexham (Mr. Rippon), and I would not add to it, although I adopt all that has been said by my two hon. Friends.
The second matter is that it will be very confusing and prejudicial to change the well-known and well-established approach of Article V of the General Development Order and to give another meaning to outline planning permission simply to deny people an exemption, that they would otherwise have, from Case C levy. It seems to be a most unfortunate episode. Even at this late hour, the Government should think again. They should not find that difficult because this change has come at a very late hour.

Mr. Costain: While there may be some legal quibble on the Amendment, may I approach it from a builder's point of view? I have declared my interest on many occasions.

It being Ten o'clock, the Debate stood adjourned.

Ordered,
That the proceedings on the Land Commission Bill may be entered upon and proceeded


with at this day's Sitting at any hour, though opposed.—[Mr. Fitch.]

Question again proposed, That those words be there inserted in the Bill.

Mr. Costain: Many developers and builders started developments in the belief that, according to the rules set out when the Bill was published, outline planning permission gave them exemption. I support what my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) has said. The rules have been changed during the race.

Mr. Skeffington: Mr. Skeffington indicated assent.

Mr. Costain: The Parliamentary Secretary disagrees.
Would builders be right in assuming that, if they started a development on a housing estate with several types of houses and then found in the course of the development that one type was more popular than another and, because of that, change the type of house, would they, under the Amendment, leaving out all the legal jargon, be exempt? In other words, will the Minister rely on collectinig additional levy which could not have been expected when the development was started by reason of the fact that the developer had found it more satisfactory to build houses which people wanted rather than houses which they thought people might want? Or do the Government

propose to continue with their dictatorial attitude of telling people what they think they should want? If the Parliamentary Secretary says that the rules have not been altered during the race, can the normal procedure of altering the type of house on a development take place or not?

Mr. Skeffington: I do not altogether understand the question of the hon. Member for Folkestone and Hythe (Mr. Costain). Perhaps I can repeat what the position is. It is always the best way of dealing with matters. [HON. MEMBERS: "No."] Certainly.
I said that the definition in Clause 94 puts beyond any question of doubt the advice which we have always given, which has been repeated time and again. Either the planning permission must authorise the work itself or any approval required by the permission must be obtained. The full intention of the Amendment is that if a development could be begun without being in conflict with the terms or conditions of the planning permission the conditions will govern the development. This seems to be obviously the intention. I cannot see why anybody should quarrel with it.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 159, Noes 113.

Division No. 189.]
AYES
[10.3 p.m.


Abse, Leo
Davies, Robert (Cambridge)
Hamilton, William (Fife, W.)


Anderson, Donald
Dewar, Donald
Hamling, William


Archer, Peter
Diamond, Rt. Hn. John
Hannan, William


Ashley, Jack
Dickens, James
Harper, Joseph


Atkins, Ronald (Preston, N.)
Dobson, Ray
Harrison, Walter (Wakefield)


Atkinson, Norman (Tottenham)
Doig, Peter
Hattersley, Roy


Bagier, Gordon A. T.
Driberg, Tom
Hazell, Bert


Beaney, Alan
Dunnett, Jack
Herbison, Rt. Hn. Margaret


Bennett, James (G'gow, Bridgeton)
Dunwoody, Dr. John (F'th &amp; C'b'e)
Hilton, W. S.


Bidwell, Sydney
Eadie, Alex
Hooley, Frank


Blackburn, F.
Edwards, Robert (Bilston)
Horner, John


Blenkinsop, Arthur
Edwards, William (Merioneth)
Howarth, Harry (Wellingborough)


Booth, Albert
Ellis, John
Howell, Denis (Small Heath)


Boston, Terence
English, Michael
Hoy, James


Bray, Dr. Jeremy
Ensor, David
Hughes, Roy (Newport)


Brooks, Edwin
Evans, Albert (Islington, S. W.)
Hunter, Adam


Brown, Hugh D. (G'gow, Provan)
Evans, Ioan L. (Birm'h'm, Yardley)
Jackson Peter M. (High Peak)


Brown, Bob (N'c'tle-upon-Tyne, W.)
Faulds, Andrew
Jeger, Mrs. Lena (H'b'n&amp;St. P'cras, S.)


Brown, R. W. (Shoreditch &amp; F'bury)
Fitt, Gerard (Belfast, W.)
Jenkins, Hugh (Putney)


Butler, Herbert (Hackney, C.)
Fletcher, Raymond (Ilkeston)
Johnson, Carol (Lewisham, S.)


Butler, Mrs. Joyce (Wood Green)
Fletcher, Ted (Darlington)
Jones. Rt. Hn. Sir Elwyn (W. Ham, S.)


Cant, R. B.
Floud, Bernard
Jones, J. Idwal (Wrexham)


Chapman, Donald
Foot, Michael (Ebbw Vale)
Kenyon, Clifford


Coleman, Donald
Forrester, John
Kerr, Dr. David (W'worth, Central)


Concannon, J. D.
Fowler, Gerry
Lawson, George


Corbet, Mrs. Freda
Fraser, John (Norwood)
Lee, John (Reading)


Dalyell Tam
Gourlay, Harry
Lestor, Miss Joan


Davidson, Arthur (Accrington)
Cray, Dr. Hugh (Yarmouth)
Luard, Evan


Davies, Dr. Ernest (Stratford)
Gregory, Arnold
Lyon, Alexander W. (York)


Davies, Harold (Leek)
Griffiths, David (Rother Valley)
Mabon, Dr. J. Dickson




McBride, Neil
Pannell, Rt. Hn. Charles
Small, William


McCann, John
Park, Trevor
Snow, Julian


MacColl, James
Parker, John (Dagenham)
Spriggs, Leslie


Macdonald, A. H.
Parkyn, Brian (Bedford)
Steele, Thomas (Dunbartonshire, W.)


Maclennan, Robert
Perry, Ernest G. (Battersea, S.)
Summerskill, Hn. Dr. Shirley


MacPherson, Malcolm
Perry, George H. (Nottingham, S.)
Swingler, Stephen


Marquand, David
Prentice, Rt. Hn. R. E.
Taverne, Dick


Marsh, Rt. Hn. Richard
Price, William (Rugby)
Varley, Eric G.


Mason, Roy
Reynolds, G. W.
Wainwright, Edwin (Deame Valley)


Mayhew, Christopher
Robertson, John (Paisley)
Walker, Harold (Doncaster)


Mellish, Robert
Robinson, Rt. Hn. Kenneth (St. P'c'as)
Wallace, George


Miller, Dr. M. 8.
Robinson, W. O. J. (Walth'stow, E.)
Watkins, David (Consett)


Mitchell, R. C. (S'th'pton, Test)
Rodgers, William (Stockton)
Wellbeloved, James


Molloy, William
Roebuck, Roy
Whitlock, William


Morris, Charles R. (Openshaw)
Rogers, George (Kensington, N.)
Willey, Rt. Hn. Frederick


Murray, Albert
Ross, Rt. Hn. William
Williams, Alan (Swansea, W.)


Newens, Stan
Ryan, John
Williams, Alan Lee (Hornchurch)


Noel-Baker, Rt. Hn. Philip (Derby, S.)
Shaw, Arnold (Ilford, S.)
Wilson, Rt. Hn. Harold (Huyton)


Norwood, Christopher
Short, Mrs. Renee (W'hampton, N. E.)
Wilson, William (Coventry, S.)


Ogden, Eric
Silkin, Rt. Hn. John (Deptford)
Yates, Victor


Orbach, Maurice
Silkin, Hn. S. C. (Dulwich)
Zilliacus, K.


Orme, Stanley
Silverman, Julius (Aston)



Owen, Dr. David (Plymouth, S'tn)
Silverman, Sydney (Nelson)
TELLERS FOR THE AYES:


Palmer, Arthur
Skeffington, Arthur
Mr. Fitch and Mr. Bishop.




NOES


Alison, Michael (Barkston Ash)
Grieve, Percy
Nott, John


Allason, James (Hemel Hempstead)
Griffiths, Eldon (Bury St. Edmunds)
Onslow, Cranley


Atkins, Humphrey (M't'n &amp; M'd'n)
Grimond, Rt. Hn. J.
Orr-Ewing, Sir Ian


Baker, W. H. K.
Hall, John (Wycombe)
Osborn, John (Hallam)


Batsford, Brian
Harris, Frederic (Croydon, N. W.)
Page, Graham (Crosby)


Bennett, Sir Frederic (Torquay)
Harris, Reader (Heston)
Percival, Ian


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Harvey, Sir Arthur Vere
Pink, R. Bonner


Biffen, John
Harvie Anderson, Miss
Price, David (Eastleigh)


Black, Sir Cyril
Hastings, Stephen
Prior, J. M. L.


Blaker, Peter
Hawkins, Paul
Pym, Francis


Body, Richard
Heald, Rt. Hn. Sir Lionel
Rees-Davies, W. R.


Boyd-Carpenter, Rt. Hn. John
Heath, Rt. Hn. Edward
Ridley, Hn. Nicholas


Brewis, John
Heseltine, Michael
Rippon, Rt. Hn. Geoffrey


Buchanan-Smith, Alick (Angus, N &amp; M)
Higgins, Terence L.
Roots, William


Campbell, Gordon
Hill, J. E. B.
Rossi, Hugh (Hornsey)


Chichester-Clark, R.
Hobson, Rt. Hn. Sir John
Royle, Anthony


Clark, Henry
Holland, Philip
Russell, Sir Ronald


Clegg, Walker
Hooson, Emlyn
Scott, Nicholas


Cooke, Robert
Hordern, Peter
Sharples, Richard


Costain, A. P.
Hornby, Richard
Sinclair, Sir George


Crawley, Aidan
Howell, David (Guildford)
Steel, David (Roxburgh)


Crosthwaite-Eyre, Sir Oliver
Hunt, John
stodart, Anthony


Crouch, David
Hutchison, Michael Clark
Taylor, Sir Charles (Eastbourne)


Cunningham, Sir Knox
Iremonger, T. L.
Taylor, Frank (Moss Side)


Dance, James
Irvine, Bryant Godman (Rye)
Thatcher, Mrs. Margaret


Davidson, James (Aberdeenshire, W.)
Jenkin, Patrick (Woodford)
Thorpe, Jeremy


Dean, Paul (Somerset, N.)
Kaberry, Sir Donald
Turton, Rt. Hn. R. H.


Dodds-Parker, Douglas
Kirk, Peter
Wainwright, Richard (Colne Valley)


Elliott, N. W. (N'c'tle-upon-Tyne, N.)
Knight, Mrs. Jill
Walker-Smith, Rt. Hn. Sir Derek


Errington, Sir Eric
Maddan, Martin
Weatherill, Bernard


Eyre, Reginald
Maude, Angus
Webster, David


Farr, John
Mawby, Ray
Whitelaw, William


Fisher, Nigel
Maxwell-Hyslop, R. J.
Wilson, Geoffrey (Truro)


Gilmour, Ian (Norfolk, C.)
Mills, Stratton (Belfast, N.)
Winstanley, Dr. M. P.


Glover, Sir Douglas
Mitchell, David (Basingstoke)
Wolrige-Gordon, Patrick


Goodhart, Philip
Monro, Hector



Goodhew, Victor
Morgan, Geraint (Denbigh)
TELLERS FOR THE NOES:


Grant, Anthony
Morrison, Charles (Devizes)
Mr. More and Mr. Younger.


Gresham-Cooke, R.
Murton, Oscar

Further Amendment made: In page 87, line 8, at the end to insert:
(9) Regulations made for the purposes of subsection (2) of this section shall be of no effect unless they are approved by a resolution of each House of Parliament.—[Mr. Willey.]

Clause 95.—(APPLICATION TO SCOTLAND.)

The Under-Secretary of State for Scotland (Dr. J. Dickson Mabon): I beg to move Amendment No. 112, in page 87, line 40, after 'substituted', to insert:
(i) except in the case mentioned in subparagraph (ii) below.
It might be for the convenience of the House if we considered Amendment No. 113 at the same time, Sir.

Mr. Speaker: If there is no objection, so be it.

Dr. Mabon: The effect of the Amendments is to provide that during the period before a Lands Tribunal for Scotland is established, a dispute about whether a particular body is entitled to exemption as a charity under Clause 57 will be referred for decision not to an arbiter appointed under the Land Compensation Act, but to the Court of Session.
There are several categories of case that are referred under the Bill to the Lands Tribunal in England and Wales. Those include all disputes about whether betterment levy should or should not be paid. In most cases, the matters at issue will be matters of valuation which can suitably be disposed of by the Lands Tribunal in England and Wales, and in Scotland, where there is no comparable body, these will be referred to arbiters appointed under the Land Compensation Act. In the case of charities, however, the ground of objection to payment of betterment levy might be whether the body making the objection was or was not a charity.
That, of course, is a legal question. While it can suitably be dealt with in England or Wales by the Lands Tribunal, which includes lawyers, it could not be suitably dealt with by Scottish arbiters, who are surveyors or valuers. The suggestion of the Amendments is to meet the point that there should be a

special arrangement for settling questions of this kind by the Court of Session.
As to the establishment of a Lands Tribunal for Scotland, that is a matter which is being discussed.

10.15 p.m.

Sir D. Walker-Smith: Will the hon. Gentleman inform the House, first, when he expects there to be a Lands Tribunal for Scotland? We have had a Lands Tribunal in England for 17 years. It has functioned very well, and gained a very high reputation, and it is not customary for Scotland to lag 17 years behind England. Can the hon. Gentleman say how soon Scotland intends to follow the good example of England and set up a Lands Tribunal?
Secondly, as the hon. Gentleman has explained, these matters will have to come to the Court of Session because the arbiters are not lawyers, and presumably, though the hon. Gentleman did not say so, cannot have the benefit of a legal assessor to sit with them. If they could have the benefit in Scotland of a legal assessor, then it would not be necessary, presumably, to legislate to send the matter to the Court of Session.
That leads me to my final question. What will be the effect of this addition to their duties on the lists of the Court of Session? Is there a great delay? I do not know. Members of the English Bar have no right of audience in the Court of Session. It is a restrictive practice which operates against us. Even those who, like myself, have the honour to have been born in Scotland, have no right of audience. We do not know whether there is a great pressure on the lists in the Court of Session. Can the hon. Gentleman say whether this will add to it, and, if so, what he proposes to do about it?

Dr. Dickson Mabon: I do not want to get involved in a discussion about restrictive practices in the legal profession. I take it from the right hon. and learned Gentleman's complaint that audience is granted to Scottish advocates in English courts, a matter which surprises me. If there is no complaint in the matter, I would not like to be dragged into a discussion about equity between the two countries.

Sir D. Walker-Smith: The only time we meet on common ground is before the Appeal Committee of the House of Lords.

Dr. Dickson Mabon: So much for the restrictive practices for which we are not responsible.
Perhaps I might now answer the two fair points made by the right hon. and learned Gentleman. As he knows, the Secretary of State for Scotland acts not only on the advice of the Lord Advocate and the Solicitor-General, but, in many cases, in conjunction with the Lord President of the Court of Session. As such, the Lord President's position has to be fully preserved and respected.
We cannot resolve this question until both parties are agreed on the setting up of a lands tribunal, and this matter, if I might put it rather delicately, is still under discussion. When the discussion ends—I hope that it will be a fruitful one, for there is no doubt about where my right hon. Friend the Secretary of State stands in this matter—we may see a lands tribunal being set up. The purpose of the two Amendments is to bridge the temporary situation before such a tribunal is created.
On the second point, I am advised that valuers and surveyors are appointed under the Land Compensation Act. The point suggested by the right hon. and learned Gentleman about assessors is a novel one, but might not carry the endorsement of the Lord President of the Court of Session. He is agreeable to our proposal, and has taken steps to see that this can be serviced if the House agrees with the Amendment. I hope that I have satisfied the right hon. and learned Gentleman.

Amendment agreed to.

Further Amendment made: In page 87, line 45, at end insert:
(ii) in the case of any question which arises as to whether levy is not chargeable by virtue of section 57 of this Act, a reference to the Court of Session, and in such a case, for the words 'require the objection to be referred to the Lands Tribunal' in section 47(1) of this Act there shall be substituted the words 'apply to the Court of Session for a decision on the objection.'—[Dr. Dickson Mabon.]

Orders of the Day — New Schedule.—(CREDIT CARRIED FORWARD FROM PREVIOUS CHARGEABLE ACT OR EVENT.)

PART I

CASES IN WHICH CREDIT ARISES

Introductory

1. For the purpose of assessing levy in respect of a chargeable act or event (in this Schedule referred to as a 'subsequent charge able act or event') a credit shall be taken to have arisen from a previous chargeable act or event (in this Schedule referred to as 'the previous chargeable act or event') in the cases specified in paragraphs 2 to 4 of this Schedule.

Credit carried forward from Case C

2. Such a credit shall be taken to have arisen where the previous chargeable act or event consisted of beginning to carry out a project of material development in respect of which notice was served under section 38, section 66(3)(b) or section 68 of this Act, and, for the purpose of assessing levy in respect of an assessable interest in the land, or part of the land, comprised in the project,—

(a) paragraph 7 or paragraph 20 of Schedule 5 to this Act had effect, and
(b) the base value of that interest, ascertained in accordance with that paragraph, together with any amount which was allowable in accordance with Part V of Schedule 4 to this Act, exceeded the market value of that interest.

Credit carried forward from Cases D and E

3. Such a credit as is referred to in paragraph 1 of this Schedule shall be taken to have arisen where the previous chargeable act or event fell within Case D or Case E and notice in respect of which it was served under section 40 or section 41 of this Act and, for the purpose of assessing levy in respect of it, the appropriate deduction for the purposes of section 33(2) or section 34(2) of this Act exceeded the amount of the compensation or consideration.

Credit carried forward from acquisition under compulsory powers

4.—(1) Such a credit as is referred to in paragraph 1 of this Schedule shall be taken to have arisen where the previous chargeable act or event was a disposition whereby an interest in land was compulsorily acquired by, or was sold to, an authority possessing compulsory purchase powers and—

(a) the circumstances of the disposition were such that a notice in respect of it was required to be served under paragraph 10 or paragraph 11 (or under both of those paragraphs) of Schedule 8 to this Act or, where the acquiring authority was the Commission, would have been required to be so served if the acquiring authority had been a body other than the Commission, and
(b) the aggregate of the amounts specified in the next following sub-paragraph exceeded the value which, for the purpose of assessing levy in respect of the disposition, constituted the market value of the relevant interest.



(2) The amounts referred to in sub-paragraph (1)(b) of this paragraph are those amounts which, for the purpose of assessing levy in respect of the disposition in question, constituted—

(a) the base value of the relevant interest;
(b) any amount which was allowable in accordance with Part V of Schedule 4 to this Act; and
(c) where the disposition was made in the circumstances specified in sub-paragraph (1) of paragraph 2 of Schedule 8 to this Act, the amount ascertained in accordance with subparagraph (2) of that paragraph.

Provisions as to interpretation of Schedule

5.—(1) In the following provisions of this Schedule, in their application to a case falling within paragraph 2 of this Schedule, 'the credit' means the amount of the excess referred to in sub-paragraph (b) of that paragraph, 'the original chargeable interest' means the assessable interest referred to in that paragraph, 'the original chargeable unit' means the land in which that interest subsisted, and 'the original chargeable owner' means the person who either was the developing owner in relation to the project in question by virtue of that interest (or by virue of that interest together with one or more other assessable interests) or (if he was not the developing owner) was entitled to that interest immediately before the date on which the carrying out of the project was begun.

(2) In the following provisions of this Schedule, in their application to a case falling within paragraph 3 of this Schedule, 'the credit' means the amount of the excess referred to it in that paragraph, 'the original chargeable interest' means the interest which for the purpose mentioned in that paragraph was the relevant interest, 'the original chargeable unit' means the land in which that interest subsisted and 'the original chargeable owner' means the person who immediately before the date which for that purpose was the relevant date was entitled to that interest.

(3) In the following provisions of this Schedule, in their application to a case falling within paragraph 4 of this Schedule, 'the credit' means the amount of excess referred to in sub-paragraph (1)(b) of that paragraph, 'the original chargeable owner' means the person in whom, immediately before the disposition referred to in that paragraph was made, the interest compulsorily acquired or sold was vested, and—

(a) if, in the circumstances in which that disposition was made, a notice was required to be served under one (but not both) of paragraphs 10 and 11 of Schedule 8 to this Act (or if the acquiring authority was the Commission, would have been required to be so served if the acquiring authority had been a body other than the Commission), 'the land previously affected' means the other land in respect of which a notice was, or would have been, required to be so served, and 'the interest previously affected' means the interest in that land which the original chargeable owner had immediately before the disposition; and

(b) if, in those circumstances, a notice was required to be served both under paragraph 10 and paragraph 11 of that Schedule (or, if the acquiring authority was the Commission, would have been required to be so served if the acquiring authority had been a body other than the Commission) 'the land previously affected' means the aggregate of all the land in respect of which notices were or would have been required to be so served, and 'the interest previously affected' means the interest in all that land which the original chargeable owner had immediately before the disposition.

6.For the purposes of the application of the following provisions of this Schedule to a case falling within paragraph 2 or paragraph 3 of this Schedule, a subsequent chargeable act or event shall be taken to be a subsequent chargeable act or event affecting the original chargeable interest if—

(a) the land, or part of the land, which, for the purpose of assessing levy in respect of it, constitutes the relevant land is or forms part of the original chargeable unit;
(b) the interest which for that purpose constitutes the relevant interest (or, in Case B, the interest of the grantor) is. or in so far as it subsists in the original chargeable unit or part of that unit is, the original chargeable interest; and
(c) the person who for that purpose is the chargeable owner (as defined by paragraph 2(1) of Schedule 5 to this Act) is either the original chargeable owner or a successor in title of the original chargeable owner, not being a successor such that he, or a previous successor in title of the original chargeable owner, derived title under a disposition for valuable consideration.

7. For the purposes of the application of the following provisions of this Schedule to a case falling within paragraph 4 of this Schedule, a subsequent chargeable act or event shall be taken to be a subsequent chargeable act or event affecting the interest previously affected if—

(a) the land, or part of the land, which for the purpose of assessing levy in respect of it constitutes the relevant land is or forms part of the land previously affected;
(b) the interest which for that purpose constitutes the relevant interest (or, in Case B, the interest of the grantor) is, or in so far as it subsists in the land previously affected or part of that land is, the interest previously affected; and
(c) the person who for that purpose is the chargeable owner (as defined by paragraph 2(1) of Schedule 5 of this Act) is either the original chargeable owner or a successor in title of the original chargeable owner, not being a successor such that he. or a previous successor in title of the chargeable owner, derived title under a disposition for valuable consideration.

PART II

PROVISIONS FOR CARRYING CREDIT FORWARD

8.—(1) The provisions of this paragraph shall have effect in relation to the first subsequent chargeable act or event affecting the original


chargeable interest (or, as the case may be, the first subsequent chargeable act or event affecting the interest previously affected) which fulfils the following conditions, that is to say—

(a) that it is a chargeable act or event falling within Case A or Case C, and
(b) that, for the purpose of assessing levy in respect of it, the relevant interest has net development value (ascertained apart from this Part of this Schedule).

(2) If the amount of that net development value (so ascertained) is greater than the credit, then—

(a) for the purpose of assessing levy in respect of that act or event, the net development value of the relevant interest shall be reduced by the credit, and
(b) the credit shall thereupon be taken to be extinguished.

(3) If the amount of that net development value is equal to the credit, then—

(a) for the purpose of assessing levy in respect of that act or event, the relevant interest shall be treated as having no net development value, and
(b) the credit shall thereupon be taken to be extinguished.

(4) If the amount of that net development value is less than the credit, then—

(a) for the purpose of assessing levy in respect of that act or event, the relevant interest shall be treated as having no net development value, and
(b) the credit shall thereupon be reduced by the amount of the net development value ascertained apart from this Part of this Schedule.

9.—(1) The provisions of this paragraph shall have effect in relation to the first subsequent chargeable act or event affecting the original chargeable interest (or, as the case may be, the first subsequent chargeable act or event affecting the interest previously affected) which fulfils the following conditions, that is to say—

(a) that it consists of a disposition granting a tenancy, and
(b) that for the purpose of assessing levy in respect of it, there is net development value realised by the disposition (ascertained apart from this Part of this Schedule).

(2) If the amount of the net development value realised by the disposition (so ascertained) is greater than the credit, then—

(a) for the purpose of assessing levy in respect of that act or event, the net development value realised by the disposition shall be reduced by the credit, and
(b) the credit shall thereupon be taken to be extinguished.

(3) If the amount of that net development value is equal to the credit, then—

(a) for the purpose of assessing levy in respect of that act or event, no net development value shall be taken to be realised by the disposition, and
(b) the credit shall thereupon be taken to be extinguished.

(5) If the amount of that net development value is less than the credit, then—

(a) for the purpose of assessing levy in respect of that act or event, no net development value shall be taken to be realised by the disposition, and
(b) the credit shall thereupon be reduced by the amount of the net development value realised by the disposition, ascertained apart from this Part of this Schedule.

10.—(1) The provisions of this paragraph shall have effect in relation to the first subsequent chargeable act or event affecting the original chargeable interest (or, as the case may be, the first subsequent chargeable act or event affecting the interest previously affected) which is a chargeable act or event falling within Case D or Case E; and in the following provisions of this paragraph 'the primary amount' means the amount of the compensation or consideration, ascertained in accordance with Part IV of Schedule 4 to this Act, less the appropriate deduction (if any) referred to in section 33(2) or, as the case may be, section 34(2) of this Act.
(2) If the primary amount is greater than the credit, then—

(a) for the purpose of assessing levy in respect of that act or event, the primary amount shall be treated as reduced by the credit, and
(b) the credit shall thereupon be taken to be extinguished.

(3) If the primary amount is equal to the credit, then—

(a) no levy shall be chargeable in respect of that act or event, and
(b) the credit shall thereupon be taken to be extinguished.

(4) If the primary amount is less than the credit, then—

(a) no levy shall be chargeable in respect of that act or event, and
(b) the credit shall thereupon be reduced by an amount equal to the primary amount.

11. Where the credit is reduced in accordance with any of the preceding provisions of this Part of this Schedule, or in accordance with any corresponding provisions contained in regulations made under section (Levy in Case F) of this Act, then, in the case of each successive subsequent chargeable act or event affecting the original chargeable interest (or, as the case may be, each successive subsequent chargeable act or event affecting the interest previously affected) those provisions of this Part of this Schedule and of the regulations shall apply in relation to the credit as so reduced (or as progressively reduced by virtue of this paragraph, as the case may be) until the whole of the credit has been extinguished.
12. The preceding provisions of this Part of this Schedule shall have effect subject to Part III of this Schedule where that Part is applicable.

PART III

ADJUSTMENT OF BASE VALUE

13. Where in accordance with paragraph 3 of this Schedule a credit is taken to have arisen from a previous chargeable act or event falling


within Case D or Case E and (apart from this Part of this Schedule) any of the provisions of Part II of this Schedule would have effect in relation to a subsequent chargeable act or event, then, for the purpose of assessing levy in respect of that subsequent chargeable act or event, either—

(a) the provisions of Part II of this Schedule shall not apply, or
(b) the provisions of the next following paragraph shall apply and the provisions of Part II of this Schedule shall apply subject to those provisions,

whichever results in the lesser amount of levy being chargeable in respect of that act or event.

14.—(1) Where the subsequent chargeable act or event falls within Case A, Case C, Case D or Case E, then (if the provisions of this paragraph are to apply) paragraph 5, paragraph 31 or paragraph 36(4) of Schedule 4 to this Act (as the case may be) shall have effect for the purpose of assessing levy in respect of it as if, for the reference to eleven-tenths of the current use value of the relevant interest, there were substituted a reference to the aggregate of—

(a) the current use value of the relevant interest in so far as it subsists in the original chargeable unit, and
(b) (if that interest extends to land other than the original chargeable unit) eleven-tenths of the current use value of that interest in so far as it subsists in that other land.

(2) Where the subsequent chargeable act or event falls within Case B and the relevant land does not comprise any land not comprised in the original chargeable unit, then (if the provisions of this paragraph are to apply) paragraph 14 of Schedule 4 to this Act shall have effect for the purpose of assessing levy in respect of it as if, in sub-paragraph (a) of that paragraph, the words "eleven-tenths of" were omitted.

(3) Where the subsequent chargeable act or event falls within Case B and the relevant land comprises land not comprised in the original chargeable unit, then (if the provisions of this paragraph are to apply) the current use value realised by the disposition shall be apportioned as between the original chargeable unit and the remainder of the relevant land in such manner as may be appropriate in the circumstances, and paragraph 14 of Schedule 4 to this Act shall have effect as if, for the reference to eleven-tenths of the current use value realised by the disposition, there were substituted a reference to the aggregate of—

(a) so much of that value as is apportioned to the original chargeable unit, and
(b) eleven-tenths of so much of it as is apportioned to the remainder of the relevant land.—[Mr. Willey.]

Brought up and read the First time.

Mr. Willey: I beg to move, That the Schedule be read a Second time.
This Schedule is in three Parts. The first Part sets out the three types of situation in which credit can arise. Part II contains the provisions for carrying

the credit forward, and Part III contains the measures to avoid evasion.
Part I deals in the second paragraph with the first of the cases, where a credit is brought forward from Case C—that is the case of a project of material development. Here the value of the land for the purpose of the development being carried out may be less than the price which the developer has paid for it. This could arise in respect of a major development, where the development began as an interim or temporary matter.
The third paragraph of Part I deals with the second credit case. This is in Case D or Case E, where the result is an assessment in which the appropriate deduction exceeds the compensation or consideration. It is the amount of the excess which is carried forward.
The fourth paragraph deals with the third case—the case brought out of Schedule 8 and grouped with the present cases. It deals with a compulsory purchase, where a set-off arises.
Part II deals with the provisions for bringing forward the credit so established. These are virtually unchanged from the provisions in Schedule 6 which we have repealed to make way for this Schedule.
Part III is designed to prevent the eleven-tenths rule being used for evasion. This would arise in a case where there were two adjacent plots of land and the owner of one covenanted prohibiting building for £100. That is a grant of a restrictive right, which would not be within Case E. If, however, the owner released the covenant for the £100 it would be assessable under Case E. If we take £10,000 as the current use value, which would become the restricted value, the eleven-tenths rule would mean that by virtue of this transaction he could get a credit of £900.
We deal with this either by allowing the credit to stand and not allowing the eleven-tenths rule to benefit anybody, or by not conferring any credit, whichever step is the more advantageous to the levy payer.

Mr. Clegg: We have waited for over 24 hours for this explanation of the First Schedule. Having heard that explanation I am hardly any the wiser. I felt from the first moment we started these proceedings and began discussing this Schedule that it was haunted. I had a nightmare last


night. In that nightmare I was being pursued by this Schedule—"Credit Carried Forward"—and it was rushing after me. Eventually it caught me, and when I turned round it said to me, in a piteous voice, "What do I mean?" and I could not tell it, so it vanished in a puff of smoke and I woke up screaming.
To be serious, the Schedule is obviously important. The right hon. Gentleman has just given us a sort of explanation of it, but he has been living with the Bill for many months—perhaps for years—and he knows it, or so we hope. He has a day-to-day knowledge of it. He has no doubt had conferences with the Parliamentary draftsman about it. What we have to consider is the person who comes to it for the first time, and who tries for the first time to make some sort of sense out of it. This is exceedingly difficult, and for that I attach no blame whatsoever to the Parliamentary draftsman; the blame should attach to the brief he was given, which was an impossible one. It would have been possible to achieve much of what the right hon. Gentleman wanted without this sort of thing.
I should like to give an example of the difficulties of trying to translate this into something comprehensible, taking credit carried forward from Case C. I intend to read this, as it is only about 10 lines. It reads:
Such a credit shall be taken to have arisen where the previous chargeable act or event consisted of beginning to carry out a project of material development in respect of which notice was served under section 38, section 66 (3)(b) or section 68 of this Act"—
On that point, one would need three other copies of the Act so that one could look at those three Clauses—
for the purpose of assessing levy in respect of an assessable interest in the land, or part of the land, comprised in the project,—
(a) paragraph 7 or paragraph 20 of Schedule 5 of this Act had effect"—
For that, one would need another two copies—
(b) the base value of that interest, ascertained in accordance with that paragraph, together with any amount which was allowable in accordance Part V of Schedule 4 to this Act, exceeded the market value of that interest.
If my calculations are correct, one would need six copies of the Bill in front of one to be able to make some sort of sense of it.
This is a serious criticism of the Schedule and of the Act, that we are moving into a period of jargon. We had a complaint from the hon. Member for West Stirlingshire (Mr. W. Baxter) in these same terms yesterday. It may seem a complaint which we have repeated, but for the people of this country, it is no joke. It is no laughing matter. It means that stuff is being churned out which affects their fortune and may affect their liberty at some future date, which is difficult to comprehend merely by reading.
We know that we live in a complex society and we do not expect things to be as simple as they used to be, but this Schedule, as part of this Act, could have been avoided if the right hon. Gentleman and his colleagues had tackled the problem and the solutions to it which they wanted in completely different ways, some of which we have outlined during our discussions. I must confess that, at the end of it all, try as I might, I could not understand it. People outside will not understand it. Until that time is reached, the citizens of the country will not get justice.

Mr. John Boyd-Carpenter: I thought that my hon. Friend the Member for North Fylde (Mr. Clegg) was unduly charitable when he suggested that the Minister understood the Schedule. I can only say that he has given no evidence to that effect. As far as I could understand, the Minister appeared to think that the Schedule was covered by the Official Secrets Act. I must protest against this method of legislating. We are dealing with a Schedule occupying four and half pages of the Notice Paper, put down, I think, fairly late last week and being discussed by the House as 10.30 on a Thursday night.
It is not as if the proceedings on the Bill had just started. The White Paper on which the Bill was based was presented as long ago as December, 1964, and there was a previous Bill on the same subject and broadly on the same lines in the last Parliament. Now, nearly two years after the submission of the original White Paper, we are confronted with an immense Schedule of this kind, put down a day or two before the last effective stage for amendment in this House, and the House is asked to accept it on the basis of a brief and cursory reading of the Minister's brief.
This is not the right way to legislate on a matter which is of the greatest importance to our fellow citizens and one which, whatever view one takes of its merits, is obviously of great complexity. Why was the substance of the Schedule not put before us months ago, either in a White Paper or in an earlier draft of the Bill?
10.30 p.m.
The Minister has had a very great deal of time to try to get the Bill right. I do not think that he would claim that even now, he has succeeded. We have Report stage rushed through, only a few days after the Minister's Amendments are tabled, and we are asked to consider this seriously, without the help of the Law Officers and, with due respect, with the minimum of help from the right hon. Friend.
We are asked to try, in the last formative stage in this House, to get this right. Quite plainly, the contents of this Schedule will cause the greatest trouble to our fellow citizens. They will give almost unlimited employment to the profession which my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) adorns, and this is the only cheerful aspect of the whole dreary matter.
In all seriousness, I would say to the Minister that this is not the right way to legislate, that it shows a contempt for Parliament and will cause his name to be regarded with regret over the years, long after the time, not far ahead, when his Department will disappear.

Mr. Graham Page: Are we to have no further explanation of this Schedule? My hon. Friend the Member for North Fylde (Mr. Clegg) has done his best with it and he is the only one who has given any explanation at all. One expects, when a Government bring forward a Schedule of this type, that we shall have some detailed explanation. I have read this Schedule, not once twice or three times, but perhaps a dozen times and I know a little about it. But I am certain that I could not put it into practice without some help from those who drafted it. Where a matter is drafted in legal form, in this way, one scarcely expects to understand it, at least very quickly. One scarcely expects to understand it

wholly without some explanation of the intentions behind it.
One drafts a legal document so that it shall be precise and introduce certain words for certain definitions, and so on. But if one drafts it in that way, one should be prepared to explain the intentions behind the Schedule, so that the legal words may be understood. We have had no such explanation here and still have a number of Schedules to get through.
If we are to receive the same sort of explanation of the other Schedules as has been given on the first, it will not hasten our proceedings. The Minister may feel that a short explanation of the Schedule may get him away by midnight, but it will not. We shall press for more and more information on these Schedules, because we do not intend to foist these on to the public without knowing something of what they are about and without being able, at this stage, to table Amendments, because we have had no explanations to enable us to put down Amendments. If we can get some explanation now, perhaps we can tell those in another place, who might be prepared to amend the Bill, where Amendments are needed. But we cannot tell whether such Amendments are needed because we have had no explanations.

Mr. Willey: I rise only to say that in the case of this Schedule, ample notice has been given. This is not a question of not having had notice, because this is the old Schedule 6, with provisions taken from Schedule 8. Not much has been added. The House is, and always will be, in very great difficulty in dealing with matters like this. The dilemma is that here we are defining the rules with great particularity. One has to do this to ensure that the levy-payer gets justice, as of right. To do this, particularly in any matter affecting land or taxation, is extremely difficult.
I am sorry that the hon. Gentleman the Member for North Fylde (Mr. Clegg), had a nightmare, but I congratulate him on being able to get some sleep between the two considerations that we are having on the Bill.

Mr. Costain: In our debate yesterday I expressed anxiety about these new Schedules and, in my anxiety to get this matter discussed, I found myself being


ruled out of order by Mr. Speaker. On that occasion I said:
One interpretation is that it will mean that tax will be charged at 87½ per cent. on any land deals".—[OFFICIAL REPORT, 26th October, 1966; Vol. 734, c. 1033.]
I used those words as I saw Mr. Speaker about to call me to order and obviously my mind wandered, for the figure should have been 78·5 per cent. and not 87½ per cent.
Yesterday, I mentioned the anxiety of those dealing in property to understand this and similar new Schedules. The Minister described this proposal as a set of rules, but the first necessity about any set of rules, whether one is playing a game or running a business, is to understand them. People cannot understand these rules, particularly after such a short discussion as we have had. I will speak at greater length on a later proposal.
If the right hon. Gentleman cannot explain the matter in detail to the House, will he give an assurance that he will adopt the attitude of the Chancellor of the Exchequer in matters affecting Finance Acts and publish an explanatory memorandum? That would ensure that the people who must abide by these rules have at least some guidance.

Mr. Willey: I am obliged to the hon. Member for Folkestone and Hythe (Mr. Costain) for making that suggestion and I will certainly take steps along the lines he suggested. This proposal is, after all, in favour of the levy payer. These are reliefs. We would not be making these provisions if we did not believe that the levy payer should be given notice of the reliefs we are providing.

Mr. Allason: I rise with some trepidation because I am due to move a new Schedule later. I would have expected more explanation of these provisions from the Minister. Those who read this debate will get the impression from the right hon. Gentleman's remarks that he has merely lifted parts of Schedule 6 and Schedule 8, put them together and that the wording is substantially the same. However, if one looks at the point where the Minister starts the quotation from Schedule 8 and then compares that with line 31 on page 133 of the Bill, it is difficult to pick out a few lines which correspond.
It is a confidence trick to suggest that this is a complete lift of one provision and that it has been combined with the sense of another. There has, instead, been a considerable change of emphasis. It would have been more reasonable for the right hon. Gentleman to have given an explanation of which paragraph he had in mind to assure us that the changes which have been made are either drafting changes or changes in favour of the levy payer. At the moment, we do not know.

Sir D. Glover: I have read these provisions and have found them completely incomprehensible, but I am neither a lawyer, a land agent, nor anything connected with this system. I was astonished to hear the Minister say that he would be taking steps to produce a memorandum for the help and guidance of people outside the House. Presumably, that will be published after we have allowed the Bill to become law.
It would have been much more sensible if we in this House, made up very largely of non-experts, had had an Explanatory Memorandum to the Bill that we could all have understood, so that we would have known what we were dealing with. As I have said on more than one occasion in these debates, and I have been confirmed in my view by the hon. Member for Stirlingshire, West (Mr. W. Baxter), the two Members who probably know least about the Bill are the Minister and the Parliamentary Secretary.
The Ministers themselves could have done with an Explanatory Memorandum during our debates. They would have probably found it useful to quote to us. They could have said, "I do not know why the hon. Member for Ormskirk is so worried about this. If he will only read paragraph 5 of the Explanatory Memorandum, which I will read to the House, he will find it as clear as daylight." They could have answered the Opposition in that way when complaint was made that their own explanations were quite incomprehensible. They would have valued a clear exposition of what all these things in the Bill mean.
It is treating the House with some contempt when the Minister now says that this publication will be produced for the laymen outside the House, when we in the House of Commons are not to have the benefit of this clear exposition


of the meaning of the Bill and the Schedules while we are in process of translating the provisions into the law of the land. It is much more important that we should have the Explanatory Memorandum so that we could know what we were doing. Of course, the right hon. Gentleman's supporters, if they are interested—and I fear that very few of them are—could have said, "Even with this Explanatory Memorandum I still do not understand what the Bill is all about, and I will not allow it to go into law until it is explained to me."

Mr. Robert Cooke: My hon. Friend will agree that if we had an Explanatory Memorandum we would understand what the Bill was about, and, therefore, the Minister would never get it through.

Sir D. Glover: I understand my hon. Friend's attitude, and I fear that that may be true. But as in the workings of a democracy the party opposite has a majority of 95 or 97—[An HON. MEMBER: "Sometimes."] Yes, sometimes there is a majority of 28 or 32—there is such a division of opinion on the other side, and there are those who have the courage of their convictions and say: "I can't stomach this, and I will not vote for it." If we had an Explanatory Memorandum, there might then be 92 or 77 who would say: "I cannot stomach this, and I will not support it."
It may be a deep plot on the part of the Government not to have an Explanatory Memorandum until after this Measure becomes law. The Minister could have said, "I understand the difficulties of hon. Members. I know how difficult you find it to go through the Clauses and particularly the Schedules, and I understand that the provisions will never be able to be put into force when they become law unless the Department for which I am temporarily responsible, but which is on notice to quit and is liable to close down, produces a memorandum in language that people can understand."
It must be clear as daylight to all those who are selling their own private houses, or going in for any other little transactions, because it has become clear from our debates that many small people will be involved in these transactions, and they will want to know what the

Bill means in language they can understand. But this document will be produced when it is too late for hon. Members on either side to be able to say, "This is a nonsense, and, therefore, we shall not carry it into law."
It seems to be treating the House of Commons with a certain degree of contempt. I wonder why the Minister has made an admission at this late hour, on the Report stage, which seems to imply that he himself does not understand the Bill. We on this side have made it clear that although we have battled with it we do not understand it. Silks, barristers-at-law, solicitors, experts in land valuation, have all asked throughout the debate, "Will the right hon. Gentleman explain this matter, because we do not understand it?" The right hon. Gentleman in his very short tenure of office, which, I understand, is drawing to a quiet and unheralded close, could have gone down in history as a far greater Minister if he had produced the explanatory memorandum before we started debating the Bill.

10.45 p.m.

Mr. Willey: The hon. Member for Ormskirk (Sir D. Glover) has, as he often does, raised an important point with which I have the greatest sympathy. As hon. Members who served on the Standing Committee know what happened in Committee, I have been in communication with the hon. Member for Crosby (Mr. Graham Page) in an endeavour to explain matters which might have been difficult without a written explanation.
There is much to be said for the hon. Gentleman's point. If the hon. Gentleman had only met me a few days ago, I assure him that he would have had such a communication in good time. We will bear his suggestion in mind for the future.

Question put and agreed to.

Schedule read a Second time, and added to the Bill.

Orders of the Day — New Schedule.—(ALLOWANCE IN RESPECT OF ESTATE DUTY.)

PART I

GENERAL PROVISIONS AS TO ALLOWANCE

1.—(1) The provisions of this Part of this Schedule shall have effect for the purpose of assessing levy in respect of a chargeable act


or event (in this Schedule referred to as 'the chargeable act or event') where—

(a) a person (in this Schedule referred to as 'the deceased') who was a predecessor of the chargeable owner died before, but not more than six years before, the relevant date;
(b) an interest in land (in this Schedule referred to as 'the dutiable interest') passed on the death of the deceased and estate duty was leviable in respect of that interest;
(c) that interest either was the chargeable interest or was an interest in part of the land in which the chargeable interest subsists and would have been the chargeable interest if it had extended to the whole of that land; and
(d) there has not before the relevant date been any previous chargeable act or event in connection with which an allowance under this Schedule fell or falls to be made in respect of that interest.

(2) For the purposes of this Schedule an interest in land shall be taken to have passed on a person's death if at his death it passed, or is deemed to have passed, for the purposes of the enactments relating to estate duty.

(3) In this paragraph 'predecessor', in relation to the chargeable owner, means a predecessor in title, not being a person from whom the chargeable owner or any other predecessor in title of his derived title under a disposition for valuable consideration.

2. Subject to paragraph 4 and to Part III of this Schedule, the appropriate allowance shall be made for the purpose of assessing levy where, in the circumstances specified in the preceding paragraph, the gross principal value of the dutiable interest exceeds the modified value of that interest in accordance with the provisions of Part II of this Schedule.

3. Where in accordance with the last preceding paragraph the appropriate allowance falls to be made, then for the purpose of assessing levy in respect of the chargeable act or event—

(a) if it falls within Case A or Case C, the market value of the relevant interest (ascertained apart from this Schedule) shall be reduced by the allowance;
(b) if it consists of a disposition falling with Case B, Case E or Case F, the amount of the consideration for the disposition (ascertained apart from this Schedule) shall be reduced by the allowance;
(c) if it consists of the accrual of a right to compensation falling within Case D or Case F, the amount of the compensation (ascertained apart from this Schedule) shall be reduced by the allowance.

4. Notwithstanding anything in paragraph 2 of this Schedule, that paragraph shall not have effect for the purpose of assessing levy in Case C in respect of a project of material development where the chargeable interest is an assessable interest by virtue of which a person is the developing owner in relation to that project in accordance with paragraph (b) or paragraph (c) of section 32(7) of this Act.

PART II

CALCULATION OF APPROPRIATE ALLOWANCE

Gross principal value

5.—(1) Subject to the following provisions of this paragraph, for the purposes of this Schedule the gross principal value of the dutiable interest shall be taken to be an amount equal to the principal value of that interest as, for the purposes of estate duty leviable on the death of the deceased, that value was or is—

(a) agreed between the person accountable for estate duty in respect of that interest and the Commissioners of Inland Revenue, or
(b) determined in proceedings between them.

(2) Where the principal value of the dutiable interest has not been so agreed or determined, but for the purposes of estate duty leviable on the death of the deceased the principal value—

(a) of the whole of his estate, or
(b) of a part of his estate which includes the dutiable interest,

has been agreed between the person accountable for the duty and the Commissioners of Inland Revenue, or has been determined in proceedings between them, that value as so agreed or determined shall be apportioned, in such manner as may be appropriate in the circumstances, as between the duitable interest and the remainder of the estate or of that part of the estate, as the case may be; and so much of that value as is apportioned to the dutiable interest shall for the purposes of this Schedule be taken to be the gross principal value of the dutiable interest.

(3) Where for the purposes of estate duty leviable on the death of the deceased the principal value of the dutiable interest was or is reduced under section 64 of the Finance Act 1960, any reference in the preceding sub paragraphs to the value as agreed or deter mined shall be construed as a reference to that value as agreed or determined apart from any reduction under that section.

Modified value

6. The modified value of the dutiable interest shall be ascertained in accordance with paragraphs 7 to 10 of this Schedule.

7. Where the dutiable interest was the chargeable interest, and for the purpose of assessing levy in respect of the chargeable act or event the base value of the relevant interest (or, in Case B, the base value realised by the disposition which constitutes the chargeable act or event) does not fall to be ascertained separately in relation to different parts of the chargeable unit in accordance with paragraph 14 of Schedule 7 to this Act, then (subject to paragraph 8 of this Schedule)—

(a) if the chargeable act or event falls within Case A, or within any of Cases C to E, and paragraph 7 of Schedule 5 to this Act has effect for the purpose of assessing levy in respect of it, the modified value of the dutiable interest shall be taken to be an amount equal to the amount of the consideration given for the last relevant disposition;


(b) if the chargeable act or event falls within any of those Cases, but paragraph 7 of Schedule 5 to this Act does not have effect for the purpose of assessing levy in respect of it, the modified value of the dutiable interest shall be taken to be an amount equal to eleven-tenths of the current use value of the relevant interest, as ascertained under Schedule 4 to this Act;
(c) if the chargeable act or event falls within Case B, and paragraph 16 of Schedule 5 to this Act has effect for the purpose of assessing levy in respect of it, the modified value of the dutiable interest shall be taken to be an amount equal to the amount of the consideration given for the last relevant disposition;
(d) if the chargeable act or event falls within Case B, but paragraph 16 of Schedule 5 to this Act does not have effect for the purpose of assessing levy in respect of it, the modified value of the dutiable interest shall be taken to be an amount equal to eleven-tenths of the current use value of the chargeable interest, as ascertained under Part II of Schedule 4 to this Act.

8.—(1) The references in sub-paragraphs (a) and (c) of the last preceding paragraph to the amount of the consideration given for the last relevant disposition shall be construed subject to the following provisions of this paragraph.

(2) Where, in the circumstances specified in either of those sub-paragraphs, the amount of the consideration given for the last relevant disposition falls to be adjusted in accordance with paragraph 9 or paragraph 14 of Schedule 5 to this Act, any such reference to the amount of that consideration shall be construed as a reference to that amount as so adjusted.

(3) In so far as any regulations made under paragraph 10 of Schedule 7 to this Act require any adjustment to be made for the purposes of Schedule 5 to this Act, those regulations may provide that references in sub-paragraphs (a) and (c) of the last preceding paragraph to the amount of the consideration given for the last relevant disposition shall be construed subject to such modifications as may be specified in the regulations.

9. Where either of the following conditions is fulfilled, that is to say—

(a) in accordance with paragraph 14 of Schedule 7 to this Act, the base value of the relevant interest (or, in Case B, the base value realised by the disposition constituting the chargeable act or event) falls to be ascertained separately in relation to different parts of the land in which the chargeable interest subsists, or
(b) the dutiable interest was an interest in part (but not the whole) of that land,

or where both of those conditions are fulfilled, paragraphs 7 and 8 of this Schedule shall have effect subject to such modifications for securing the separate ascertainment of the matters referred to in those paragraphs in relation to different parts of that land, and subject to such provisions (if any) as to apportionment and as to aggregation of amounts apportioned, as are appropriate in the circumstances.

10. Where the chargeable act or event falls within Case F, the modified value of the dutiable interest shall be ascertained in such manner as may be prescribed by regulations made under this Schedule.

Excess gross value

11. There shall then be ascertained the amount (if any) by which the gross principal value of the dutiable interest exceeds the modified value of that interest; and that amount is in the following provisions of this Schedule referred to as the excess gross value of the dutiable interest.

Net principal value

12. For the purposes of this Schedule the net principal value of the dutiable interest shall be ascertained in accordance with paragraphs 13 to 19 of this Schedule.

13. Where at the death of the deceased the dutiable interest was subject to a mortgage or heritable security, and for the purposes of estate duty leviable on that death the sum secured by that mortgage or heritable security, or part of that sum, fell or falls to be deducted from the value of the dutiable interest, then for the purpose of ascertaining the net principal value of the dutiable interest that sum, or that part of it, as the case may be, shall be deducted from the gross principal value of that interest.

14.—(1) There shall also for that purpose be deducted from the gross principal value of the dutiable interest so much (if any) of the funeral expenses and (subject to the next following sub-paragraph) so much of the debts and liabilities of the deceased (other than debts secured by a mortgage or heritable security to which the dutiable interest was subject) as for the purposes of estate duty leviable on his death was or is allowable as a deduction from the value of the dutiable interest.

(2) The preceding sub-paragraph does not apply to any liability in respect of capital gains tax chargeable on chargeable gains deemed to accrue on the death of the deceased or otherwise chargeable in consequence of his death.

15.—(1) The provisions of this paragraph shall have effect where, by virtue of section 24 of the Finance Act 1965, a taxable disposal of the dutiable interest is deemed to have occurred on the death of the deceased and a gain deemed to have accrued on that disposal (in this paragraph referred to as 'the gain attributed to the disposal') is included among the gains accruing to the deceased in the year of assessment in which he died.

(2) Subject to paragraph 17 of this Schedule, for the purpose of ascertaining the net principal value of the dutiable interest—

(a) there shall be deducted from the gross principal value of that interest so much of the capital gains tax (if any) chargeable in respect of chargeable gains accruing to the deceased in that year as would not have been chargeable if the gain attributed to the disposal had not been deemed to accrue; and


(b) if the whole or any part of the gain attributed to the disposal was not chargeable to capital gains tax in that year because of relief for losses accruing in that year or in any earlier year of assessment, there shall also be deducted the amount of capital gains tax which would have been charged on the gain attributed to the disposal or that part of it if that gain, or that part of it, as the case may be, had been the only gain accruing to the deceased in that year and had all been chargeable to tax.

16.—(1) The provisions of this paragraph shall have effect where, by virtue of section 25 of the Finance Act, 1965, a taxable disposal of settled property is deemed to have occurred on the death of the deceased and a gain deemed to have accrued on that disposal (in this paragraph referred to as 'the gain attributed to the disposal') is included among the gains accruing to the trustees of the settlement in the year of assessment in which the deceased died.

(2) Subject to the next following paragraph, for the purpose of ascertaining the net principal value of the dutiable interest—

(a) there shall be deducted from the gross principal value of that interest so much of the capital gains tax (if any) chargeable in respect of chargeable gains accruing to the trustees in that year as would not have been chargeable if the gain attributed to the disposal had not been deemed to accrue; and
(b) if the whole or any part of the gain attributed to the disposal was not chargeable to capital gains tax in that year because of relief for losses accruing in that year or in any earlier year of assessment, there shall also be deducted the amount of capital gains tax which would have been charged on the gain attributed to the disposal or that part of it if that gain, or that part of it, as the case may be. had been the only gain accruing to the trustees of the settlement in that year and had all been chargeable to tax.

17.—(1) Subject to the following provisions of this paragraph, where—

(a) for the purpose of assessing levy in respect of a chargeable act or event paragraph 15 or paragarph 16 of this Schedule has effect by reference to a taxable disposal deemed to have occurred on the death of the deceased (in this paragraph referred to as 'the first taxable disposal'), and
(b) for the purpose of assessing levy in respect of a subsequent chargeable act or event that paragraph falls to be applied by reference to another taxable disposal deemed to have occurred on that death,

any reference in that paragraph to the tax chargeable in respect of gains accruing to the deceased or to the trustees of the settlement in the year of assessment in which the deceased died shall be construed as a reference to the tax which would have been so chargeable if the gain deemed to accrue on the first taxable disposal had not been deemed to accrue.

(2) Where there is a series of three or more chargeable acts or events, and three or more taxable disposals are deemed to have occurred on the death of the deceased, the preceding

sub-paragraph shall have effect in relation to each chargeable act or event of the series successively, so that, for the purpose of assessing levy in respect of each subsequent charge able act or event, there is excluded from the calculation of capital gains tax the chargeable gain deemed to accrue on any of those taxable disposals taken into account in ascertaining the net principal value of the dutiable interest in relation to a previous chargeable act or event of the series.

18. Subject to the next following paragraph, the gross principal value of the dutiable interest, reduced by the deductions (if any) required to be made by paragraphs 13 to 17 of this Schedule, shall for the purposes of this Schedule be taken to be the net principal value of that interest.

19. Where under section 64 of the Finance Act 1960 the principal value of the dutiable interest was or is reduced by a percentage specified in that section, then, for the purpose of ascertaining the net principal value of the dutiable interest, the gross principal value of that interest, or, if one or more deductions fall to be made under paragraphs 13 to 17 of this Schedule, so much of it as remains after those deductions have been made, shall be reduced by the like percentage; and the amount resulting from that reduction shall for the purposes of this Schedule be taken to be the net principal value of that interest.

Amount of estate duty attributable to net principal value

20. There shall be ascertained the rate at which estate duty leviable on the death of the deceased would have been payable on the dutiable interest if the following conditions had been fulfilled (whether any of those conditions was in fact fulfilled or not), that is to say—

(a) section 23 of the Finance Act 1925 (which relates to agricultural property) did not apply to the estate of the deceased;
(b) section 28 of the Finance Act 1954 (reduced rate of duty on certain business assets) did not apply to that estate; but
(c) in a case where subsection (1) of section 13 of the Finance Act 1914 (which relates to marginal relief) applied to that estate, the rate of estate duty payable was the lower rate referred to in that subsection,

and in all other respects the circumstances relevant for ascertaining the rate of duty leviable were those which actually existed.

21. There shall then be calculated what amount of estate duty would have been payable in respect of the dutiable interest if—

(a) the amount on which the duty fell to be charged in respect of the dutiable interest had been the net principal value of that interest, and
(b) the rate of duty chargeable in respect of that interest had been the rate ascertained under paragraph 20 of this Schedule,

and in all other respects the circumstances relevant for computing the duty were those which actually existed.

22. For the purposes of the following provisions of this Schedule the amount of estate duty attributable to the net principal value


of the dutiable interest shall be taken to be the amount calculated under paragraph 21 of this Schedule.

Effective rate of duly and appropriate allowance

23.—(1) There shall be calculated what proportion the amount of estate duty attributable to the net principal value of the dutiable interest bears to the gross principal value of that interest.

(2) That proportion, expressed as a percentage, is in this Schedule referred to as the effective rate of duty.

24. The appropriate allowance shall then be the amount which bears to the excess gross value of the dutiable interest the proportion which constitutes the effective rate of duty.

PART III

PROCEDURE

Notice of claim

25.—(1) For the purpose of assessing levy no allowance under this Schedule shall be made in respect of an interest in land, as being the dutiable interest for the purposes of this Schedule, unless the chargeable owner, or a successor in title of his in whom the chargeable interest has become vested by operation of law, has served on the Commission a notice (in this Part of this Schedule referred to as a 'notice of claim') specifying that interest and stating—

(a) that a person specified in the notice died on a date so specified, and that a grant of probate or of letters of administration in respect of his estate was obtained on a date and at a registry so specified;
(b) that estate duty was leviable on the death of the person specified in the notice; and
(c) that the person so specified was a predecessor (as defined by paragraph 1(3) of this Schedule) of the chargeable owner.

(2) A notice of claim may be served either before or after the service of a notice of assessment of levy in respect of the levy in question, but shall not have effect if served after such a notice of assessment of levy has resulted in an operative assessment of levy.

(3) In the application of this paragraph to Scotland, for the reference to a grant of probate or of letters of administration there shall be substituted a reference to confirmation, and for the reference to a registry there shall be substituted a reference to the sheriff court.

(4) The preceding provisions of this paragraph shall have effect subject to any regulations made under Part IV of this Schedule in cases to which those regulations apply.

Certificate of Commissioners of Inland Revenue

26.—(1) Where a person (in this Part of this Schedule referred to as 'the claimant') serves on the Commission a notice of claim, then if the Commission have served, or intend to serve, a notice of assessment of levy in respect of a chargeable act or event, in such circumstances that for the purpose of assessing levy in respect of it—

(a) the chargeable interest (or an interest in part of the land in which the chargeable

interest subsists, which would have been the chargeable interest if it had extended to the whole of that land) is the interest specified in the notice of claim, and
(b) the relevant date is a date not more than six years after the date specified in the notice of claim as the date of the death to which it relates,

the Commission shall apply to the Commissioners of Inland Revenue for a certificate under this Part of this Schedule.

(2) An application under this paragraph shall setout the matters stated in the notice of claim and the name and address of the claimant.

27.—(1) For the purpose of dealing with an application under this Part of this Schedule, the Commissioners of Inland Revenue shall assume that a chargeable act or event has occurred in the circumstances specified in paragraph 1 of this Schedule and that, in relation to that chargeable act or event,—

(a) the person specified in the notice of claim was a predecessor of the chargeable owner as mentioned in paragraph 1(1)(a) of this Schedule, and
(b) the interest specified in the notice of claim is the dutiable interest for the purposes of this Schedule.

(2) On those assumptions the Commissioners of Inland Revenue shall issue to the Commission a certificate stating—

(a) the gross principal value of the dutiable interest;
(b) whether that value was ascertained under sub-paragraph (1) or under sub-paragraph (2) of paragraph 5 of this Schedule;
(c) if it was ascertained under sub-paragraph (2) of that paragraph, what was agreed or determined, as mentioned in that subparagraph, as being the principal value of the estate of the deceased, or, as the case may be, what was so agreed or determined as being the principal value of such a part of the estate as is mentioned in that subparagraph and what was that part of the estate; and
(d) the effective rate of duty,

and shall send a copy of the certificate to the person specified in the application as the claimant at the address so specified.

28. Subject to paragraph 30 of this Schedule, a certificate issued under this Part of this Schedule shall be conclusive evidence of the matters stated in the certificate, except that, if it states that the gross principal value of the dutiable interest was ascertained under subparagraph (2) of paragraph 5 of this Schedule, the certificate shall not be conclusive evidence of that value.

29.—(1) If, in a case where a certificate under this Part of this Schedule states that the gross principal value of the dutiable interest was ascertained under sub-paragraph (2) of paragraph 5 of this Schedule, the claimant wishes to dispute that value, on the grounds that it represents an incorrect apportionment of the value specified in the certificate in accordance with paragraph 27(2)(c) of this Schedule, he may, within such time as may be


allowed by the rules, appeal on those grounds against the certificate to the Lands Tribunal; and, if the Tribunal allows the appeal, it shall either discharge the certificate or vary it in such manner as the Tribunal may determine.

(2) In this paragraph 'the rules' means any rules made for the purposes of this paragraph under section 3 of the Lands Tribunal Act 1949, or, in the case of proceedings in Scotland before an official arbiter, under section 3 of the Land Compensation (Scotland) Act 1963.

30.—(1) A certificate issued by the Commissioners of Inland Revenue under this Part of this Schedule shall be construed as having been issued on the assumptions specified in paragraph 27(1) of this Schedule and shall have effect without prejudice to any question whether those assumptions are correct or not.

(2) In relation to a certificate which is varied on or in consequence of an appeal under paragraph 29 of this Schedule, the preceding sub-paragraph shall have effect in relation to the certificate as so varied.

PART IV

SUPPLEMENTARY PROVISIONS

31.—(1) Provision may, in accordance with the following provisions of this Part of this Schedule, be made by regulations so as to require or enable an allowance to be made under this Schedule for the purpose of assessing levy in respect of a chargeable act or event where one or more of the conditions specified in paragraph 1(1) of this Schedule are not fulfilled, but the following conditions are fulfilled, that is to say—

(a) property consisting of the land in which the chargeable interests subsists or of part of that land or of an interest in that land or part of that land (whether subsisting at law or only as an equitable interest) passed on the death of a person and estate duty was leviable in respect of that property;
(b) that person died not more than six years before the relevant date or, where the property was an interest in expectancy and estate duty in respect of it was not paid until it fell into possession, the interest fell into possession not more than six years before the relevant date; and
(c) there has not before the relevant date been any previous chargeable act or event in connection with which an allowance under this Schedule fell or falls to be made in respect of the passing of that property on that death.

(2) In this paragraph any reference to property passing on a death is a reference to its passing, or being deemed to pass, on that death for the purposes of the enactments relating to estate duty.

32. Regulations made in pursuance of paragraph 31 of this Schedule may provide that, in such cases where the conditions specified in that paragraph are, or are claimed to be, fulfilled as may be specified in the regulations, the preceding provisions of this Schedule shall apply, subject to such exceptions and modifications, and together with any

such additional provisions, as may be so specified.

33.—(1) Regulations made in pursuance of paragraph 31 of this Schedule may provide that in such cases where the conditions specified in that paragraph are, or are claimed to be, fulfilled as may be specified in the regulations (not being cases in relation to which the regulations make provision in accordance with the last preceding paragraph) the Commission may make such allowance under this Schedule as, after consultation with the Commissioners of Inland Revenue, they determine to be appropriate.

(2) Any regulations made in accordance with the preceding sub-paragraph may provide that, where it is claimed that the power conferred on the Commission by the regulations is or may be exercisable, the provisions of Part III of this Schedule shall apply, subject to such exceptions and modifications, and together with any such additional provisions, as may be specified in the regulations.

34.—(1) Where for the purpose of assessing levy in respect of a chargeable act or event there are two or more deaths to which the preceding provisions of this Schedule are applicable, those provisions shall have effect in relation to those deaths cumulatively so as to require or enable the appropriate allowance to be made by reference to each of them.

(2) In this paragraph any reference to the preceding provisions of this Schedule shall be construed as including a reference to any regulations made under this Part of this Schedule.

35. In this Schedule, in relation to a chargeable act or event, 'the chargeable interest' and 'the chargeable owner' have the meanings assigned to them by paragraph 2(1) of Schedule 5 to this Act, and 'the last relevant disposition' has the meaning assigned to it by paragraph 6 of that Schedule.—[Mr. Skeffington.]

Brought up, and read the First time.

Mr. Skeffington: I beg to move, That the Schedule be read a Second time.
I apologise for the fact that the Schedule is of some length. I have meditated on whether I should give an explanation of every paragraph and have decided that this is unnecessary. There are some parts of the Schedule which everyone will agree are clear, or at any rate clearer than others. It is almost inevitable that, when an attempt is being made to put into legislative form a concept such as this, it must be spelt out at some length. I have prepared as carefully as I can a summary of the main provisions. I hope that when I have concluded the House will be somewhat farther along the road than they are at present, in so far as the Schedule is not already crystal clear.
I am sure that the purpose of the Schedule will receive general approbation, because it is to ensure that, where


other duty is payable, the interest so affected does not have to pay twice in respect of a contribution which is already made. Put more succinctly, the purpose of the Schedule is to provide, in effect, that the amount of Estate Duty which has been charged on development value and which will also be subject to levy is to be set off as a deduction from market value when assessing levy on the first chargeable act or event after the death in respect of which the Estate Duty is leviable.
Part I sets out the conditions in which the allowance is to be made and the way in which it is to be taken into account. I have already said that it is by deduction from market value. [Interruption.] Did the hon. Member for Ormskirk (Sir D. Glover) wish to intervene?

Sir D. Glover: I apologise to the hon. Gentleman. I was just referring to his three hon. Friends below the Gangway as "See no evil, hear no evil, speak no evil".

Mr. Skeffington: Part I of the Schedule sets out the conditions in which an allowance is to be made, and the way in which it is to be done. If right hon. and hon. Members opposite look at paragraph 1 they will see the conditions which apply.
Part II is concerned with the calculation of the allowance. The overlap between Estate Duty and levy is broadly the amount by which the market value of the property for the purposes of Estate Duty, called the "gross principal value" in the Schedule, exceeds the base value for the purposes of the levy. I am sure that after all our long discussions here and in Committee, and with the expert knowledge of the hon. Member for Crosby (Mr. Graham Page), of these calculations, I need not once again define base value.
The excess of the gross principal value over the base value is called in the Schedule "excess gross value". In practice, if we had taken precisely the base value used for assessing the levy this could, in some circumstances, lead to the levy-payer not being given a generous or proper allowance. That is why some slight changes have been made to the concept of base value for the purposes of the Schedule. This changed version

of the base value is called "modified value".
The rate at which Estate Duty is actually borne may be less than the nominal rate of Estate Duty because, as I believe the hon. Member for Hornsey (Mr. Rossi) mentioned yesterday, there are deductions for debts, mortgages and other matters of that kind, and the application of such factors as quick succession relief. Paragraphs 12 to 22 of the Schedule are concerned with taking into account all these matters which are relevant to the determination of estate duty, to convert what I call the nominal rate of duty into the actual or the effective rate of duty which is paid. This rate, multiplied by the excess gross value, which is the amount of development value subject to both these imposts, is then the amount of relief to be given. This, I think, fairly takes into account not only the existing practice but the added impost which the interest in the land may attract because a development levy may be paid.
Part III is concerned with procedure. Perhaps I can clear up one point which worried hon. Members yesterday. The notice of claim under paragraph 25 and the application for relief under the new Clause 4 are different notices. The notice to be served under paragraph 25 can be served at any time before the notice of assessment of levy becomes operative. Normally, any potential levy-payer will be asked early in the process of assessment to supply information, under various Clauses of the Bill already discussed, to make the assessment possible, and particularly information about how the relevant land has been acquired. This notice will contain an invitation to make a claim—so that it is brought to the attention of the levy-payer under this paragraph—if the circumstances are satisfied that there has been a death on which there is a potential liability for estate duty. The period for making the claim is very much more than the two months which I think the hon. Member for Hornsey suggested yesterday. It would be much longer than that.
The calculation of the amount of the appropriate allowance is partially the responsibility of the Commissioners of Inland Revenue and partially the responsibility of the Land Commission. It is for the Inland Revenue to produce the gross principal value and the effective


rate of duty. These are factors which can be extracted from information which has been settled in the course of determining the liability to Estate Duty, which, of course, is open to the normal appeal in that context. It is for this reason that the certificate is conclusive—we had some argument about this yesterday and in Committee—except where the figure of gross principal value for the particular property has not been determined independently. In these circumstances, there is a right of appeal to the Lands Tribunal on the valuation. I am glad to give that assurance, which I was asked for yesterday.

Sir D. Glover: Did I hear the hon. Gentleman speak of "yesterday in Committee"? I am sure that he would like to correct that.

Mr. Skeffington: I am obliged. I meant yesterday, though I am not quite sure when it was in terms of yesterday or today. We seem to have passed a kind of Parliamentary date line now. But, to be fair, we did also have discussions on the point in Standing Committee.
The certificate is conclusive, except when the figure of gross principal value has not been determined independently, and, in these circumstances, I was saying, there is a right of appeal to the Lands Tribunal on the valuation. All the other parts of the calculation which are the responsibility of the Land Commission, including the determination of modified base value, are open to appeal in the same way as all other parts of the assessment for levy.
Part IV of the Schedule is principally concerned—this is the first three paragraphs—with a power to make regulations extending the range of cases in which the allowance for Estate Duty can be made. It is intended primarily that these regulations will adapt the provisions of the Schedule to deal with the special problems of land held under trusts.
I conclude by saying that the provisions of the Schedule have no effect on the determination of liability for Estate Duty—this, of course, is still a matter for Inland Revenue—and they do not impose any additional burden upon the citizen. They are concerned solely with giving relief from levy in cases

where the impost has already been paid in respect of betterment value.

Mr. Rossi: We had some discussion on this Schedule yesterday, and several questions were raised which were not answered then and which, though I listened to him attentively, I did not hear the Parliamentary Secretary answer now. I shall, therefore, repeat the questions, though avoiding all the details of the argument yesterday, which would be quite unnecessary.
By means of a simple—if that be the right word—algebraic formula, I tried to interpret in mathematical form the method of calculation set out verbally in the Schedule. My first question is this: was my algebraic formula a fair or unfair representation of what the Schedule does? In other words, did I understand what I read, and did I express it correctly? If I am wrong, I should be glad of correction, because this is something which I shall have to work elsewhere in the days to come and I want to be sure that I have it clear in my mind.
I raised one question on the formula which was not answered yesterday and has not been answered today. This relates to the method of arriving at the net principal value by making certain deductions from the gross principal value. The Schedule sets out that one must first take the probate value of the piece of land and deduct any charge on the land, say, a mortgage. It then provides that one must also make deductions for funeral expenses and debts and liabilities of the deceased.
But as I mentioned yesterday, the funeral expenses, debts and liabilities of the deceased are not a charge on a part of the estate, but they are a charge on the whole of the estate. Therefore, when one is making this deduction from the gross principal value of a piece of land in order to find the net principal value, is one entitled to deduct the whole of the funeral expenses, the whole of the debts and liabilities of the deceased's estate, or does one only apply some proportion thereof that can be notionally attributed to some asset or proportion of the whole of the deceased's estate?
11.0 p.m.
There is no wording in this Schedule that suggests it is correct to use either


method. I am seeking an explanation from the Parliamentary Secretary, because this is to be worked by practitioners advising their clients. This is one of the things they must know. It is a basic part of the algebraic formula to be operated so as to assess the allowances to which people are entitled. It is a factor that occurs right at the very beginning of the formula and everything will turn on this. If you do not get it right at the beginning you will end up with the wrong answer. I must press the Parliamentary Secretary to tell me which is the correct method. Will he undertake to amend the Schedule so that the correct method is spelt out clearly and correctly?
The next question I have to raise, which I did not mention yesterday because I was endeavouring a certain degree of simplicity and I thought this might be an unnecessary complication, is that in paragraph 14(2) in Part 2 of the Schedule we are told that a charge for Capital Gains Tax should not be deducted from the gross principal value. Then paragraph 15(2) proceeds to tell us how we must deduct it.
I would like the Parliamentary Secretary to give me, if he would, an explanation of the meaning of paragraphs 14(2) and 15(2), because there may be a contradiction there and it certainly does affect the algebraic formula to which I made reference.
Now, the next matter to which I made reference yesterday was this question of the notice of claim read in conjunction with new Clause 4 that was discussed yesterday. The Parliamentary Secretary has just given us a general explanation—a gloss—which does not to my mind answer the precise point I raised with him yesterday.
What he has said very quickly is that the two notices in the two parts are not the same notice. I would like him to draw my specific attention to the wordings of both the Schedule and the new Clause and show me the two paragraphs relating to these notices and show me where it is said they are different. I cannot see it myself, but he has made a general statement to this effect and I would be grateful if he would draw my specific attention to where this is said in the Amendments before us.
The point I tried to make yesterday was this—that the Commission under new Clause 4 is being given power to grant relief for a period of up to six years after a notice of assessment of levy has been served where an allowance should have been claimed but has not been claimed. But this relief can only be granted if two circumstances already exist. Those two circumstances are, first, that the notice of assessment of levy has become an operative assessment of levy, and, secondly, that a certificate has been issued by the Commissioners of Inland Revenue under Part III of the Schedule.
We know that a notice of assessment of levy becomes an operative assessment of levy within two months of service under Clause 46 of the Bill if a counter-notice has not been served. As I mentioned yesterday, where questions of unclaimed allowances come into play there is a general inference that the person entitled has not been taking the right steps that he should have been taking under the Bill. It is a fair assumption that this kind of case is likely to arise where there has been no counter-notice, where there has been no reference to the Lands Tribunal and where one has an operative assessment within the very short period of two months of the notice of assessment being served.
If there is an operative assessment, the applicant is too late to make a notice of claim under paragraph 25(2) of Part III of the Schedule, because that paragraph states that a notice of claim shall not have effect if an operative assessment is already in existence. If it is of no effect, the Commissioners cannot issue their certificates. But the operative assessment and the issue of the certificate are the two prerequisites of the Commission giving relief. It is complete and utter nonsense.

Mr. Graham Page: The chicken and the egg.

Mr. Rossi: Exactly, or the bird that flies in ever-decreasing circles.
I ask the indulgence of the House for repeating at some length an argument which we made yesterday, but I received no answer to this argument yesterday, no explanation from the Parliamentary Secretary or the Minister, and I have received no answer today. All I have been told is that they are two different notices.


If they are two different notices of claim, will the Parliamentary Secretary please show me the words where that is said? I cannot find them in my copy of the Amendments.
We know that my hon. Friend the Member for Crosby (Mr. Graham Page) has copies of the Bill with blank pages. It may well be that the Parliamentary Secretary has pages of the Notice Paper with Clauses we have not seen. That may well be the explanation. We are waiting for an explanation. We have not got it yet.
To recapitulate, I am asking whether my algebraic formula is correct. If it is wrong, will the Parliamentary Secretary direct my attention to where it is wrong? Secondly, I want to know what we do with the funeral debts and liabilities of the deceased. When we are arriving at the net principal value, do we deduct the whole from the gross principal value of one asset of the estate, or do we apportion them. If we have to apportion them, will we get a new wording to make that clear? The third point is the one of the notice of claim, on which I have just spoken.
Those matters of detail are matters of practice, in effect, to which professional advisers must know the answer before they can deal with their clients' affairs in due course under this abominable piece of legislation when it becomes law.
There is a matter of principle that underlies the Schedule. The Minister and the Parliamentary Secretary tell us that they are being generous and are making a concession. They are making some concession, it is true, but only after considerable pressure by hon. Members from this side in Committee. It is only as a result of the pressure in Committee that we are seeing some concession about Estate Duty. But what kind of concession are we getting? We are told that we have to find the value of an asset of the estate which is to be called the net principal value. That is the probate value of a piece of land, after certain deductions along the lines which we have just been discussing. Having got that reduced probate value—and those of us who are practitioners know what probate values are—we have to make a deduction from that value of a base value. In the case of a piece of land, we have to go back to the last purchase, find out the price then, and deduct

that price from the probate value of the land at the date the owner died.
It is only that difference between the two figures that has to be referred to a reduced rate of Estate Duty—not the rate of duty which the estate has already borne, but another fictional effective rate of duty which we have to arrive at by a series of elaborate computations. It is that difference in the value of the land multiplied by this artificial kind of Estate Duty that gives us the allowance which we can set off against the betterment levy.
It is virtually no concession at all when one thinks in terms of what the probate value of a piece of land is. We know what the land would fetch on a forced sale at the date of death, and it is always a knocked down value. It is common knowledge among valuers and professional people that the probate value of a house is a knocked down value. Having got the knocked down value, one deducts the value the last time that it was sold and gets relief on the little bit which is left. That is the wonderful concession which the Government are giving people behind this smokescreen of 380-odd words in an incomprehensible Schedule.
What kind of deal is that? It is no deal at all. It is another confidence trick of the kind that we are only too accustomed to receive from hon. Members opposite from the Prime Minister down wards. We on this side of the House are here to expose confidence tricks, and I hope that this is one which has been well and truly exposed.
I hope that I shall be forgiven if I repeat an argument which was made yesterday. I think that it is one of validity, and it certainly represents the views of hon. Members on this side of the House. We are concerned with the situation of a family in which a death occurs and, on that death, Estate Duty is paid on the family home. Within a relatively short period of time, the home has to be sold for one reason or another. Along comes the Land Commission and says, "We want to charge a levy. We want another whack out of this family because it has sold its home within a short period of the death on which it paid Estate Duty." We say that there must be considerable relief. The State


should not penalise that family twice in a short period of time.
The only fair way to do it is to offset one tax against the other and deduct the whole of the Estate Duty which has been borne already by that property from the levy which is now sought to be charged on the house. That is the only fair way to do it, and one can achieve that purpose by a short paragraph of about 10 lines, rather than 387 lines which pretend to give a concession but give nothing at all.
This is a travesty. This is a general principle and there is a wide division between the two sides on the principle. The Schedule is not accepted in anything it sets out to do. Apart from that, knowing the majority that hon. Members opposite have, and their determination to foist measures of this kind on the public, we nevertheless want to see that these measures are intelligible and that people know their rights.
It is to that purpose which I directed my earlier questions and I am still awaiting a reply from the Parliamentary Secretary.

11.15 p.m.

Mr. Robert Cooke: I am happy to follow my hon. Friend the Member for Hornsey (Mr. Rossi) because I have a number of questions to ask. No doubt the Parliamentary Secretary and his many advisers will be able to work on my hon. Friend's questions while I put mine.
I was glad that the hon. Gentleman made this point about a concession, or so-called concession. If a Government intend to steal the assets of an unfortunate citizen, and then they change their mind and decide not to steal so many, that is surely a very little concession. In fact, it is not a concession at all.
My hon. Friend made a further point about a family forced to sell its asset or home or house and then having to pay a further levy or tax. This is indefensible. It is taxing the poorer people while the richer people can escape, because owners of the estate who can afford to put off the sale will not have to pay the levy and those who need the money will find themselves having to pay yet more.
My hon. Friend mentioned that there were over 380 lines in the Schedule. I have tried during the evening to make

them intelligible to myself. I must confess that I have made pretty heavy weather of it. As a result of a careful reading of the Schedule I have a number of questions to ask. I heard an hon. Member behind me who was outside the confines of the Chamber say that he understood it. I hope that we will have some explanation from the back benches opposite, because we have had little from the Front Bench.
I am glad to see that the number of hon. Members on the benches opposite has increased considerably since I began my remarks, when it seemed that the majority was not held by the Government but by the Opposition; although I think that the majority is held by the staff of the Minister's Department lurking not far from this Chamber and where we can see them and by many more behind the scenes.
I want to know more about the formula which my hon. Friend mentioned. I cannot find it anywhere in the Schedule. Perhaps one of my hon. Friends will supply me with it before I conclude my remarks.
Now I come to the very tricky questions which spring to mind on studying the Schedule and listening to the Ministerial speech which opened this debate. We have heard that capital gains are to be taken into account, but suppose someone who hoped to make a capital gain made, as a result of the operation of this Schedule and Estate Duty and other taxes, a capital loss on the transaction. Would it be possible to set that off against Capital Gains Tax?
There is the further question of the allowance. Any allowance is welcome. Although we do not accept the principle of all this, what about the case of land which goes to the National Trust in lieu of estate duty? Is that land to be valued at its value when developed, because the point of it going to the Trust is to prevent it being developed and to protect it for the enjoyment of the community? Or is it to be valued at the value it would have if free-for-all development were allowed and filling stations and all sorts of other expensive horrors were allowed to be built?
What about land on which there is a covenant specifically preventing its development, land which, were it not


for the covenant, would be of immense value if its beauty were destroyed and every conceivable commercial exploitation took place?
I now come to a question which is by no means hypothetical, because legislation passing through the House has a bearing on it. I am thinking of a piece of land which is designated under the provisions of what we all believe will be the Civic Amenities Act. This legislation has the support of the Government, and of both sides of the House. Under it a local authority will be able to designate a piece of land as being of historical and architectural interest to prevent it being destroyed or developed. What would happen if the levy were to fall on a piece of land which subsequently was designated in this way? What benefit will accrue to the miserable taxpayer, and what preparations have the Government made for dealing with this situation which no doubt will arise at some future time?
My hon. Friend asked a number of questions, and I should like to amplify one of them a little. I should like a little more information about funeral expenses. In the calculations which apply to the provisions of this Schedule, will the Minister allow any reasonable funeral expenses, or will there be a limit? The Inland Revenue can be very tough about this. A person may be faced with the problem of providing a memorial on a scale which matches other memorials in the area. This may result in considerable expense for him. The Inland Revenue is very often difficult about this sort of thing and says that a plain granite slab is appropriate.
Many other questions were asked by my hon. Friend. I do not want to detain the House for very much longer. I conclude by asking one question which I think is highly appropriate when we are dealing with a Schedule of 387 lines. Will the cost of professional advice, which is vitally necessary to every private citizen affected by the provisions of this Schedule, be allowed to be set off, and therefore is the miserable citizen at least to get his legal expenses reimbursed, because of the tremendous cost put on the taxpayer by this iniquitous Schedule?

Mr. Rossi: On a point of order. If my hon. Friend refers to column 1069,

and the subsequent columns of yesterday's HANSARD, he will find the formula for which he asked.

Mr. Robert Cooke: I am obliged to my hon. Friend.

Mr. Deputy Speaker: That is not a point of order.

Mr. Skeffington: I shall endeavour to answer as many points as I can. I may not be able to deal with them all, but I undertake to communicate with the hon. Members concerned in respect of those points which I do not cover.
Perhaps I might deal, first, with the point raised by the hon. Member for Bristol, West (Mr. Robert Cooke), about land passing to the National Trust. I cannot see that this, in the normal way, would be developable land. It therefore would not attract levy. However, if the hon. Gentleman will let me have in writing the sort of case that he has in mind I shall consider it, but I do not think that levy will be attracted to it, and, therefore, I do not think that the difficulties which he foresees will arise.
The hon. Gentleman will find the question of funeral expenses dealt with in paragraph 14 of the Schedule. If he looks at that, I hope that it will make the position clear to him.
The hon. Member for Hornsey (Mr. Rossi) asked about the algebraic formula. So much of it as I remember, and so much of it as I understood then and now, leads me to believe that the hon. Gentleman is approximately correct, but I would not want to go further than that, because it is obvious that this is not an easy matter. I do not pretend that it is. Indeed, I congratulate the hon. Gentleman on having got there. So far as I can recall—I have not had time to look it up—what he said was right.
The normal position about debts is that they follow the existing rules. Debts will be deducted first from personal property and only in so far as this is inadequate will debts other than mortgages be set off against real property. This is the normal practice and, as the hon. Member realises, very much in the taxpayer's favour.
The hon. Member asked me about the notices. I think that I have the position right. The first notices will arise under paragraph 25 of the Schedule. They


start the process. Without them the Commission would not know that it had to apply for a certificate. Then there are applications for relief, necessary only when a certificate arises after the levy has been assessed. This attracts the appeal provisions of new Clause 4. These are two separate events. I think that I may be able to curtail the discussion by saying that if I am wrong about this I shall write to the hon. Member correcting what I have said.

Mr. Rossi: What is really troubling me—and perhaps when the hon. Gentleman writes to me he will deal with this point—is that as I understand the Schedule the Commissioners of Inland Revenue cannot issue a certificate until a proper and effective notice of claim has been made. That notice must be made before there is an operative assessment of levy. Therefore, new Clause 4 cannot be brought in until after there has been an operative assessment of levy. The Commissioners cannot issue a certificate until there is a valid notice of claim. Perhaps this point could be dealt with.

Mr. Skeffington: As I understand, my right hon. Friend made the point earlier that the attention of those concerned will be drawn to these matters, and an undertaking was given that if for some reason anyone was prejudiced because of the non-arrival of the appropriate certificate the matter would be dealt with administratively. I am happy to repeat that undertaking.
Capital Gains Tax is dealt with in paragraphs 15 and 16. These follow Section 24 of the Finance Act, 1965, which provided that where property passes on the death of an individual for the purpose of Capital Gains Tax the relevant assets are
deemed to be disposed of by him… for a consideration equal to their market value".
The tax is charged on the gain so accruing. The same Section provides that such chargeable gains shall be added to other chargeable gains which have already accrued before death.
The Section makes the tax on such gains deductible from the value of the estate for the purpose of Estate Duty. The amount to be deducted in respect of outstanding tax will come in a single

figure, corresponding to the whole of the outstanding liabilities for tax and no figure normally exists for the amount of tax payable in respect of the chargeable gain arising on the deemed disposal of a single property. It is, therefore, necessary to provide a rule to determine how much Capital Gains Tax should rank as a deduction in finding the net principal value of the property in question. This is done by paragraph 15. This applies the formula which everyone now knows, relating to the top slice of income.
If the hon. Member will look at paragraph 17 he will see that it deals with the case where there may be more than one chargeable event. In this case the top slice accruing on the surplus gain is deducted in that way.
I hope that I have answered the questions put to me. If there are some which I have not answered I will take them up in correspondence.

Mr. Costain: An American, referring to the work of this House, described our Committees as "Government by conversation". We have now reached the stage of Government by correspondence. The Minister has kindly said that he will write to my hon. Friend answering any questions with which he has not dealt tonight, but I always thought that the idea of the House of Commons was that we should be able to give our constituents some ideas to help them become legally-minded and to keep the laws of the country.
Is there no procedure to cover the case where a Minister cannot answer questions? I give the Minister his due; he has made the bravest attempt yet to answer our questions on this Schedule.
Is there any way ——

11.30 p.m.

Mr. Skeffington: These are rather minor points on a very complicated Schedule. I said that I would write if I had missed any. I do not know that I have. It is a little unfair of the hon. Gentleman to try to take advantage of this offer. If he has any point in mind, I will be delighted to answer it in the House or by letter. He could always put down a Question.

Mr. Costain: I obviously made a mistake in giving the hon. Gentleman credit for being helpful. I must appeal here on behalf of the many people who think


that they ought to understand this. There is something wrong with our procedure that we should have to rely on Parliamentary Questions to bring out matters which should have been dealt with on Report. If the memorandum which is to be published will make a special point of this, I withdraw my objection.

Mr. Robert Cooke: Will my hon. Friend not concede that it is how the courts interpret this Act—when it becomes an Act—which matters, and that what the Minister says or writes to any hon. Member makes not a jot of difference, and that we must be certain, if we are to have this thing on the Statute Book at all, that it makes some sort of legal sense?

Mr. Costain: I thank my hon. Friend for that valid point, but before a man can go to the courts, he must understand what he is going to the courts about; and we have not achieved that so far.

Mr. Reginald Eyre: Considering the Schedule and thinking about the situation of the Minister and the Parliamentary Secretary with as much sympathy as possible, I cannot help thinking that, if this Schedule and similar Schedules were capable of explanation, we would have been given that explanation: they would certainly have had a better shot at giving that explanation.
The truth is that this and other Schedules, and other large parts of the Bill, are beyond simple explanation. There is none, which is why we have been treated to this weaving and ducking by the Parliamentary Secretary: an explanation cannot be communicated in terms which are understandable to ordinary human beings. The Schedule is typical of the too fantastically complicated conception which they have attempted to reduce to words and incorporate in legislation.
My hon. Friend the Member for Hornsey (Mr. Rossi) made the most effective attempt at explaining the difficulties of the Schedule. I would say to hon. Gentlemen below the Gangway opposite that he made a particular and special attempt to look at this mess of words

in a practical way and to pose the problems which will exist for professional people who must carry out this work. Many hon. Members on both sides are used to dealing with problems of this kind and know that the Bill is beyond comprehension. It is too fantastically complicated.
The difficulty is that this complicated conception will make the most awful mess of a great number of transactions which affect ordinary people. In many cases of death, people will be involved with a great team of valuers, accountants and solicitors, who will have to struggle to understand the Bill. We have tried to understand it. We have had some reason able experience of these things and in our opinion it is beyond comprehension——

Mr. Cranley Onslow: It is meant to be beyond comprehension.

Mr. Eyre: —and it is an unworkable system. The right hon. Gentleman should understand that it will add at least another year of quarrelling to the administration of an estate. If one considers the calculations and negotiations which will have to take place and the figures which will have to be exchanged between the parties, one sees that this will be so. It will add enormously to the cost of the administration of that estate. Valuers, accountants and solicitors will not work for nothing. It will add at least one third to the estate's administration.
Having said that the new Schedule is totally unworkable, we must regard it as a conception, a great theory, which has been assembled as a mass of words and squirted at those who will have to try to administer it. Professional people will not understand it, it is totally unworkable and it is utterly discredited. The right hon. Gentleman and the Parliamentary Secretary will suffer badly in reputation when this comes to be recognised outside.

Question put and agreed to.

Schedule read a Second time, and added to the Bill.

Orders of the Day — New Schedule.—(DEDUCTIONS FROM LEVY IN RESPECT OF CAPITAL GAINS TAX AND CORPORATION TAX.)

Orders of the Day — PART I

CHARGEABLE ACT OR EVENT CONSTITUTING TAXABLE DISPOSAL


Cases in which chargeable act or event constitutes taxable disposal


5
1. For the purposes of this Schedule a disposition falling within Case A, Case B, Case E or Case F shall be taken to constitute a taxable disposal if—



(a) for the purposes of Part III of the Finance Act 1965 it constitutes a disposal of an asset on which chargeable gains accrue to a person, or would so have accrued if the assumed tax condition had been fulfilled in relation to that disposal, or


10
(b) for the purposes of that Part of that Act as applied to corporation tax by Part IV of that Act it constitutes a disposal of an asset on which chargeable gains accrue to a company, or would so have accrued if the assumed tax condition had been fulfilled in relation to that disposal.


15
2. For the purposes of this Schedule the accrual of a right to compensation falling within Case D or Case F shall be taken to constitute a taxable disposal if—



(a) for the purposes of Part III of the Finance Act 1965 the receipt of compensation in pursuance of that right constitutes a disposal of an asset on which chargeable gains accrue to a person, or would so have accrued if the assumed tax condition had been fulfilled in relation to that disposal, or


20
(b) for the purposes of that Part of that Act as applied to corporation tax by Part IV of that Act the receipt of that compensation constitutes a disposal of an asset on which chargeable gains accrue to a company, or would so have accrued if the assumed tax condition had been fulfilled in relation to that disposal.


Chargeable act or event fulfilling relevant conditions as to Schedule 5


25
3. For the purposes of this Schedule a chargeable act or event shall be taken to fulfil the relevant conditions as to Schedule 5 if, for the purpose of assessing levy in respect of it,—



(a) the last relevant disposition was a disposition falling within the antecedent period, and


30
(b) paragraph 7 or (in Case B) paragraph 16 of Schedule 5 to this Act has effect.



4. For the purposes of this Schedule a chargeable act or event to which the last preceding paragraph does not apply shall be taken to fulfil the relevant conditions as to Schedule 5 if, for the purpose of assessing levy in respect of it,—


35
(a) a disposition would have been the last relevant disposition, and would have been a disposition falling within the antecedent period, and



(b) paragraph 7 or (in Case B) paragraph 16 of Schedule 5 to this Act would have had effect,



if the antecedent period had extended to the first appointed day.


40
5. For the purposes of this Schedule a chargeable act or event shall be taken to fulfil the relevant conditions as to Schedule 5 if, for the purpose of assessing levy in respect of it,—


45
(a) in accordance with paragraph 14 of Schedule 7 to this Act the base value of the relevant interest (or, in Case B, the base value realised by the disposition constituting the chargeable act or event) falls to be ascertained separately in relation to different parts of the land in which the chargeable interest subsists, or would have fallen to be so ascertained if the antecedent period had extended to the first appointed day, and


50
(b) for the purposes of any such separate ascertainment the conditions specified in sub-paragraphs (a) and (b) of paragraph 3 of this Schedule are fulfilled (or would, if the antecedent period had extended to the first appointed day, have been fulfilled) in relation to every part of that land.


Chargeable act or event partly fulfilling relevant conditions as to Schedule 5


55
6. For the purposes of this Schedule a chargeable act or event shall be taken to be a chargeable act or event partly fulfilling the relevant conditions as to Schedule 5 if, for the purpose of assessing levy in respect of it,—


60
(a) in accordance with paragraph 14 of Schedule 7 to this Act the base value of the relevant interest (or, in Case B, the base value realised by the disposition constituting the chargeable act or event) falls to be ascertained separately in relation to different parts of the land in which the chargeable interest subsists, or would have fallen to be so ascertained if the antecedent period had extended to the first appointed day, and

65
(b) for the purposes of any such separate ascertainment the conditions specified in sub-paragraphs (a) and (b) of paragraph 3 of this Schedule are fulfilled (or would, if the antecedent period had extended to the first appointed day, have been fulfilled) in relation to one or more parts of that land (in this Schedule referred to as 'the part or parts fulfilling the relevant conditions') but are not, or (as the case may be) would not have been, fulfilled in relation to the remainder of that land.


Provisions for making appropriate deduction


70
7. The appropriate deduction shall be made for the purpose of assessing levy in respect of any chargeable act or event which—



(a) constitutes a taxable disposal, and



(b) fulfils the relevant conditions as to Schedule 5.


75
8. The appropriate deduction shall also be made for the purpose of assessing levy in respect of any chargeable act or event which—



(a) constitutes a taxable disposal, and



(b) is a chargeable act or event partly fulfilling the relevant conditions as to Schedule 5.

PART II

80
TAXABLE DISPOSAL PRECEDING CHARGEABLE ACT OR EVENT


Introductory



9. For the purposes of this Schedule an act or event (whether actual or one which by virtue of any provision of Part III or Part IV of the Finance Act 1965 is deemed to have occurred) shall be taken to have constituted a taxable disposal if—


85
(a) for the purposes of Part III of the Finance Act 1965 it constituted a disposal of an asset on which chargeable gains accrued to a person, or would so have accrued if the assumed tax condition had been fulfilled in relation to that disposal, or


90
(b) for the purposes of that Part of that Act as applied to corporation tax by Part IV of that Act it constituted a disposal of an asset on which chargeable gains accrued to a company, or would so have accrued if the assumed tax condition had been fulfilled in relation to that disposal, or


95
(c) for the purposes of section 82 of that Act it constituted a disposal of an asset on which chargeable gains accrued to a company in the circumstances specified in subsection (1) of that section, or would so have accrued if the assumed tax condition had been fulfilled in relation to that disposal.


100
10.—(1) For the purposes of this Part of this Schedule a previous chargeable act or event shall be taken to have been a chargeable act or event affecting the chargeable interest if that interest was the chargeable interest for the purpose of assessing levy in respect of that chargeable act or event.



(2) For the purposes of this Part of this Schedule a previous chargeable act or event shall be taken to have been notified if it was or is notified in accordance with the provisions as to notification contained in Part III of this Act.


Disposal by way of gift


105
11. The appropriate deduction shall (subject to paragraph 15 of this Schedule) be made for the purpose of assessing levy in respect of a chargeable act or event where—


110
(a) before the first appointed day, but not more than six years before the relevant date, there was a disposal of the chargeable interest to a person by way of gift (including any such gift in settlement as is mentioned in section 25(2) of the Finance Act 1965) and that disposal constituted a taxable disposal;



(b) after that disposal and before the first appointed day there was not any disposition for valuable consideration under which the chargeable owner or a predecessor in title of his became entitled to the chargeable interest; and


115
(c) there has not before the relevant date been any previous notified chargeable act or event affecting the chargeable interest.


Disposal deemed to have occurred on death



12. The appropriate deduction shall (subject to paragraph 15 of this Schedule) be made for the purpose of assessing levy in respect of a chargeable act or event where—


120
(a) by virtue of section 24(1) of the Finance Act 1965 a disposal of the chargeable interest is deemed to have occurred on a person's death before the first appointed day but not more than six years before the relevant date and that disposal constituted a taxable disposal;

125
(b) after that person's death and before the first appointed day there was not any disposition for valuable consideration under which the chargeable owner or a predecessor in title of his became entitled to the chargeable interest; and



(c) there has not before the relevant date been any previous notified chargeable act or event affecting the chargeable interest.


Disposal deemed to have occurred in relation to settled property


130
13. The appropriate deduction shall (subject to paragraph 15 of this Schedule) be made for the purpose of assessing levy in respect of a chargeable act or event where—


135
(a) by virtue of subsection (3) or subsection (4) of section 25 of the Finance Act 1965 (which relate respectively to settled property to which a person becomes absolutely entitled and settled property in which a life interest terminates) a disposal of the chargeable interest is deemed to have occurred before the first appointed day but not more than six years before the relevant date and that disposal constituted a taxable disposal;


140
(b) after the occasion on which that disposal is deemed to have occurred and before the first appointed day there was not any disposition for valuable consideration under which the chargeable owner or a predecessor in title of his became entitled to the chargeable interest; and



(c) there has not before the relevant date been any previous notified chargeable act or event affecting the chargeable interest.


Application of paragraphs 11, 12 and 13 to disposal of interest in part of chargeable unit


145
14.—(1) The provisions of this paragraph shall have effect for the purpose of assessing levy in respect of a chargeable act or event where a disposal has occurred, or by virtue of any provision of the Finance Act 1965 referred to in paragraph 11, paragraph 12 or paragraph 13 of this Schedule is deemed to have occurred, in relation to an interest (in this Schedule referred to as 'the interest comprised in the disposal') which, being an


150
interest in part of the land in which the chargeable interest subsists, would have been the chargeable interest if it had extended to the whole of that land, and that disposal constituted a taxable disposal.


155
(2) If the conditions specified in sub-paragraphs (a), (b) and (c) of any of those paragraphs would be fulfilled if, in sub-paragraphs (a) and (b) of that paragraph, any reference to the chargeable interest were a reference to the interest comprised in the disposal, then that paragraph shall have effect as if those conditions were fulfilled.


Exclusion of certain chargeable interests in Case C


160
15.—(1) Notwithstanding anything in paragraphs 11 to 14 of this Schedule, none of those paragraphs shall have effect for the purpose of assessing levy in Case C in respect of a project of material development where the chargeable interest is an assessable interest by virtue of which a person is the developing owner in relation to the project in accordance with paragraph (b) or paragraph (e) of section 32(7) of this Act.


165
(2) Where the preceding sub-paragraph has effect in relation to the chargeable interest, then, for the purpose of assessing levy in respect of any subsequent chargeable act or event in relation to which that interest is the chargeable interest, the chargeable act or event referred to in the preceding sub-paragraph shall be disregarded in determining whether the condition specified in paragraph 11(c), paragraph 12(c) or paragraph 13(c) of this Schedule is fulfilled.

PART III

170
CALCULATION OF APPROPRIATE DEDUCTION


Introductory


175
16.—(1) Where any of the operative provisions of Part I or Part II of this Schedule requires the appropriate deduction to be made, it shall be construed as requiring the principal amount of levy payable apart from that provision to be reduced by an amount determined in accordance with this Part and Part IV of this Schedule.



(2) Where two or more of those provisions are applicable to the same chargeable act or event, they shall have effect cumulatively and the deduction appropriate to each of them shall be made in accordance with the preceding sub-paragraph.


180
(3) In this Part and in Part IV of this Schedule any reference to an operative provision of Part I or Part II of this Schedule is a reference to any of the following, that is to say—



(a) paragraphs 7, 8, 11, 12 and 13 of this Schedule, and



(b) paragraphs 11, 12 and 13 of this Schedule, as each of those paragraphs has effect by virtue of paragraph 14 of this Schedule.

185
17. Where in accordance with paragraph 1, paragraph 2 or paragraph 9 of this Schedule an act or event is taken to constitute or to have constituted a taxable disposal, then in the following provisions of this Schedule, in their application to that taxable disposal,—


190
(a) 'the taxpayer' means the person or company to whom chargeable gains accrue or accrued on that disposal or would so have accrued if the assumed tax condition had been fulfilled in relation to that disposal;



(b) 'the relevant year or period' means the year of assessment or accounting period in which those chargeable gains accrue or accrued or would so have accrued; and



(c) 'tax' means capital gains tax or corporation tax, as the case may be.


195
18.—(1) In this Part of this Schedule 'the increase (if any) in the current use value of the chargeable interest', in relation to a taxable disposal, means the amount (if any) by which the value of the chargeable interest immediately before that disposal, calculated on the assumption specified in sub-paragraph (3) of this paragraph, exceeded the value of that interest at the relevant earlier time, calculated on the like assumption.


200
(2) For the purposes of the preceding sub-paragraph—


205
(a) where the gain accruing on the disposal in question, or the gain which would so have accrued if the assumed tax condition had been fulfilled, is, was or would have been treated as a chargeable gain by virtue only of section 17(15) or section 82(3) of the Finance Act 1965, the relevant earlier time is the time immediately after the acquisition of the chargeable interest by the taxpayer, and



(b) in any other case, the relevant earlier time is the time of the acquisition of that interest by the taxpayer or 6th April 1965, whichever was the later.


210
(3) The assumption referred to in sub-paragraph (1) of this paragraph, in relation to the calculation of value at any time referred to in that sub-paragraph, is that, at any time subsequent to the time in question, planning permission—



(a) would be granted for any development of the relevant land which does not constitute material development, but



(b) would not be granted for any development of that land which constitutes material development.


215
(4) Sub-paragraphs (1) and (2) of paragraph 4 of Schedule 7 to this Act and (without prejudice to the assumption specified in the last preceding sub- paragraph) paragraph 6 of that Schedule shall have effect for calculating value for the purposes of this paragraph.


220
(5) For the purposes of the application of this paragraph to a chargeable act or event, the definition of' material development' in section 94(2) of this Act, and any regulations made for the purposes of that definition which are in force at the relevant date, shall be deemed always to have had effect.


General provisions for calculating appropriate deduction where assumed tax condition fulfilled


225
19.—(1) For the purpose of assessing levy in respect of a chargeable act or event which fulfils the relevant conditions as to Schedule 5, where the assumed tax condition is fulfilled in relation to the taxable disposal in question, the appropriate deduction (whether required by virtue of Part I or by virtue of Part II of this Schedule) shall, subject to paragraph 24 of this Schedule, be calculated in accordance with the following provisions of this paragraph.


230
(2) There shall be ascertained how much of the tax (if any) to which the taxpayer is or was chargeable for the relevant year or period would not have been so chargeable if any chargeable gain which accrued on that taxable disposal had not accrued.


235
(3) If the whole or part of any chargeable gain which accrued on the taxable disposal in question was not chargeable to tax in the relevant year or period because of relief for losses accruing in that year or period or in any earlier year or period, there shall be ascertained how much tax would have been chargeable in the relevant year or period on that gain, or that part of it, as the case may be, if—



(a) that gain, or that part of it, as the case may be, had been the only gain accruing to the taxpayer in the relevant year or period, and


240
(b) the whole of that gain, or the whole of that part of that gain, as the case may be, had been chargeable to tax.



(4) The appropriate deduction shall then be calculated as follows, that is to say—


245
(a) where amounts are ascertained under both of sub-paragraphs (2) and (3) of this paragraph, it shall be the aggregate of the amounts ascertained under those subparagraphs;



(b) in any other case, it shall be the amount ascertained under one or other of those sub-paragraphs.

250
20.—(1) For the purpose of assessing levy in respect of a chargeable act or event which neither fulfils nor partly fulfils the relevant conditions as to Schedule 5, where the assumed tax condition is fulfilled in relation to the taxable disposal in question, the appropriate deduction required by any provision of Part II of this Schedule shall, subject to paragraph 24 of this Schedule, be calculated in accordance with the following provisions of this paragraph.


255
(2) There shall be ascertained how much of the tax (if any) to which the taxpayer is or was chargeable for the relevant year or period would not have been so chargeable if any chargeable gain accruing on the taxable disposal in question had been limited to the increase (if any) in the current use value of the chargeable interest.


260
(3) There shall then be ascertained how much of any chargeable gain accruing on the taxable disposal in question would not so have accrued if that gain had been limited as mentioned in sub-paragraph (2) of this paragraph; and the part of that gain which in those circumstances would not have accrued is in the following provisions of this paragraph referred to as 'the excess gain'.


265
(4) If the whole or part of the excess gain would not have been chargeable to tax in the relevant year or period because of relief for losses accruing in that year or period or in any earlier year or period, there shall be ascertained how much tax would have been chargeable in the relevant year or period on the excess gain, or that part of it, as the case may be, if—



(a) the excess gain, or that part of it, as the case may be, had been the only gain accruing to the taxpayer in the relevant year or period, and


270
(b) the whole of the excess gain, or the whole of that part of it, as the case may be, had been chargeable to tax.



(5) The appropriate deduction shall then be calculated as follows, that is to say—


275
(a) where amounts are ascertained under both of sub-paragraphs (2) and (4) of this paragraph, it shall be the aggregate of the amounts ascertained under those subparagraphs;



(a) in any other case, it shall be the amount ascertained under one or other of those sub-paragraphs.


General provisions for calculating appropriate deduction where assumed tax condition not fulfilled


280
21.—(1) For the purpose of assessing levy in respect of a chargeable act or event which fulfils the relevant conditions as to Schedule 5, where the assumed tax condition is not fulfilled in relation to the taxable disposal in question, the appropriate deduction (whether required by virtue of Part I or by virtue of Part II of this Schedule) shall, subject to


285
paragraph 24 of this Schedule, be calculated in accordance with the following provisions of this paragraph.


290
(2) There shall be ascertained how much of the tax (if any) to which the taxpayer would have been chargeable for the relevant year or period if the assumed tax condition had been fulfilled in relation to that disposal would not have been so chargeable if any chargeable gain which, in those circumstances, would have been taken to accrue on that disposal were treated as not having accrued.


295
(3) If the whole or part of any such chargeable gain would not have been chargeable to tax in the relevant year or period because of relief for losses accruing in that year or period or in any earlier year or period, there shall be ascertained how much tax would have been chargeable in the relevant year or period on that gain, or that part of it, as the case may be, if—



(a) that gain, or that part of it, as the case may be, had been the only gain accruing to the taxpayer in the relevant year or period, and



(b) the whole of that gain, or the whole of that part of that gain, as the case may be, had been chargeable to tax.


300
(4) The appropriate deduction shall then be calculated as follows, that is to say—



(a) where amounts are ascertained under both of sub-paragraphs (2) and (3) of this paragraph, it shall be the aggregate of the amounts ascertained under those sub-paragraphs;


305
(b) in any other case, it shall be the amount ascertained under one or other of those sub-paragraphs.


310
22.—(1) For the purpose of assessing levy in respect of a chargeable act or event which neither fulfils nor partly fulfils the relevant conditions as to Schedule 5, where the assumed tax condition is not fulfilled in relation to the taxable disposal in question, the appropriate deduction required by any provision of Part II of this Schedule shall, subject to paragraph 24 of this Schedule, be calculated in accordance with the following provisions of this paragraph.

315
(2) There shall be ascertained how much of the tax (if any) to which the taxpayer would have been chargeable for the relevant year or period if the assumed tax condition had been fulfilled in relation to that disposal would not have been so chargeable if any chargeable gain which, in those circumstances, would have been taken to accrue on that disposal had been limited to the increase (if any) in the current use value of the chargeable interest.


320
(3) There shall then be ascertained how much of any chargeable gain which, if the assumed tax condition had been fulfilled in relation to that disposal, would have been taken to accrue on it would not have been taken so to accrue if that gain had been limited as mentioned in sub-paragraph (2) of this paragraph; and the part of that gain which in those circumstances would not be taken to have accrued is in the following provisions of this paragraph referred to as 'the excess gain'.


325
(4) If the whole or part of the excess gain would not have been chargeable to tax in the relevant year or period because of relief for losses accruing in that year or period or in any earlier year or period, there shall be ascertained how much tax would have been chargeable in the relevant year or period on the excess gain, or that part of it, as the case may be, if—


330
(a) the excess gain, or that part of it, as the case may be, had been the only gain accruing to the taxpayer in the relevant year or period, and



(b) the whole of the excess gain, or the whole of that part of it, as the case may be, had been chargeable to tax.



(5) The appropriate deduction shall then be calculated as follows, that is to say—


335
(a) where amounts are ascertained under both of sub-paragraphs (2) and (4) of this paragraph, it shall be the aggregate of the amounts ascertained under those subparagraphs;



(b) in any other case, it shall be the amount ascertained under one or other of those sub-paragraphs.


Chargeable act or event partly fulfilling relevant conditions as to Schedule 5


340
23—(1) Where in accordance with any operative provision of Part I or Part II of this Schedule the appropriate deduction is required to be made for the purpose of assessing levy in respect of a chargeable act or event partly fulfilling the relevant conditions as to Schedule 5 (as defined by paragraph 6 of this Schedule), the taxable disposal to which that provision relates (in this paragraph referred to as 'the relevant taxable disposal') shall, for the purposes of this Part of this Schedule, be treated as if it had been two separate taxable disposals, that is to say—


345
(a) a taxable disposal limited to the part or parts fulfilling the relevant conditions (in this paragraph referred to as 'the first separate disposal'), and


350
(b) a taxable disposal limited to the remainder of the land in which the chargeable interest subsists (in this paragraph referred to as 'the second separate disposal and



(2) If the operative provision in question is paragraph 8, then for the purpose of calculating the appropriate deduction paragraph 19 or, as the case may be, paragraph 21 of this Schedule shall apply as if the taxable disposal which occurred had been the first separate disposal and not the relevant taxable disposal, and accordingly as if—


355
(a) in paragraph 19 of this Schedule (where that paragraph is applicable) any reference to the chargeable gain which accrued on the taxable disposal in question were a reference to so much of the chargeable gain which accrued on the relevant taxable disposal as is properly attributable to the first separate disposal, and


360
(b) in paragraph 21 of this Schedule (where that paragraph is applicable) any reference to the chargeable gain which would have been taken to accrue on the taxable disposal in question if the assumed tax condition had been fulfilled in relation to it were a reference to so much of the chargeable gain which in those circumstances would have been taken to accrue on the relevant taxable disposal as is properly attributable to the first separate disposal.


365
(3) If the operative provision in question is any provision of Part II of this Schedule, then the appropriate deduction shall be the aggregate of two deductions calculated separately as follows, that is to say—



(a) a deduction calculated in relation to the first separate disposal in accordance with sub-paragraph (2) of this paragraph, and


370
(b) a deduction calculated in relation to the second separate disposal in accordance with the next following sub-paragraph.


375
(4) For the purpose of calculating the deduction in relation to the second separate disposal, paragraph 20 or, as the case may be, paragraph 22 of this Schedule shall apply as if in that paragraph any reference to any chargeable gain which would have accrued on the taxable disposal in question in any circumstances specified in that paragraph were a reference to so much of any chargeable gain which in those circumstances would have accrued on the relevant taxable disposal as is properly attributable to the second separate disposal.

380
(5) For the purpose of determining how much of any chargeable gain which accrued, or would in any particular circumstances have accrued, on the relevant taxable disposal if properly attributable to the first separate disposal or the second separate disposal, as mentioned in sub-paragraph (2) of sub-paragraph (4) of this paragraph, that gain shall


385
be treated as apportioned as between those separate disposals in accordance with the principles applicable to any apportionment required by the provisions of the enactments relating to the tax.


Successive chargeable acts or events



24.—(1) Subject to the following provisions of this paragraph, where—


390
(a) in accordance with any operative provision of Part I or Part II of this Schedule the appropriate deduction is required to be made by reference to a taxable disposal (in this paragraph referred to as 'the first taxable disposal') for the purpose of assessing levy in respect of a chargeable act or event (in this paragraph referred to as 'the previous chargeable act or event'), and…


395
(b) in accordance with any such provision the appropriate deduction is required to be made by reference to another taxable disposal on which chargeable gains accrue or accrued to the same person or company in the same year of assessment or accounting period, or would so have accrued if the assumed tax condition had been fulfilled, and that deduction is so required to be made for the purpose of assessing levy in respect of a subsequent chargeable act or event (in this paragraph referred to as 'the subsequent chargeable act or event').


400
any reference in paragraphs 19 to 22 of this Schedule to the tax to which the taxpayer is or was, or would in any specified circumstances have been, chargeable for the relevant year or period shall be construed as a reference to the tax to which the taxpayer would (or would in those circumstances) have been chargeable for the relevant year or period if any chargeable gain which accrued on the first taxable disposal, or would have accrued


405
on that disposal if the assumed tax condition had been fulfilled, had not or would not have so accrued.



(2) Where there is a series of three or more chargeable acts or events, and three or more taxable disposals on which chargeable gains accrue or accrued to the same person or company in the same year of assessment or accounting period or would so have


410
accrued if the assumed tax condition had been fulfilled, the preceding sub-paragraph shall have effect in relation to each chargeable act or event of the series successively, so that, for the purpose of assessing levy in respect of each subsequent chargeable act or event, there is excluded from the calculation the chargeable gain which accrues or accrued (or, as the case may be, would have accrued) on any of those taxable disposals


415
taken into account in calculating the appropriate deduction in relation to a previous chargeable act or event of the series.



(3) For the purposes of this paragraph it is immaterial in what order of time any taxable disposals occur, if they occur in the same year of assessment or accounting period.

PART IV

420
CERTIFICATION OF APPROPRIATE DEDUCTION



25. It shall be the duty of the Commission to apply to the inspector appearing to them to be the appropriate inspector for a certificate under this Part of this Schedule in any case where—


425
(a) it appears to the Commission that for the purpose of assessing levy in respect of a chargeable act or event the appropriate deduction is required to be made, or



(b) the person on whom a notice of assessment of levy is served has, whether before or after the service of that notice but before that notice has resulted in an operative assessment of levy, served on the Commission a notice claiming that the appropriate deduction is so required to be made.


430
26. A notice under paragraph 25(b) of this Schedule need not specify the amount of the deduction claimed and shall have effect if (however expressed) it indicates—



(a) whether the appropriate deduction is claimed by virtue of Part I or by virtue of Part II of this Schedule;


435
(b) if it is claimed by virtue of Part II of this Schedule, the name of the taxpayer, the date of the act or event which constitutes the taxable disposal in question, the name of the person to whom chargeable gains accrued, or if the assumed tax condition had been fulfilled would have accrued, on that disposal and his address at that date and (in general terms) the nature of that disposal; and


440
(c) such particulars as are sufficient to identify the inspector to whom the person serving the notice made his last return of income for the purposes of the Income Tax Acts.



27. Any application under paragraph 25 of this section which is made in pursuance of a notice served in accordance with sub-paragraph (b) of that paragraph shall set out the matters indicated in that notice.

445
28. Without prejudice to the last preceding paragraph, any application under paragraph 25 of this Schedule shall indicate the circumstances, and the operative provision of Part I or Part II of this Schedule, appearing to the Commission to be those by virtue of which, for the purpose of assessing levy in respect of the chargeable act or event in question, the appropriate deduction is or may be required to be made; and, where paragraph 7 or


450
paragraph 8 of this Schedule is so indicated, the application shall state the date of the act or event which constitutes the taxable disposal and the name and address of the person or company to whom chargeable gains accrued, or if the assumed tax condition had been fulfilled would have accrued, on that disposal.


455
29.—(1) For the purpose of dealing with an application under paragraph 25 of this Schedule, the inspector shall assume that the opinion of the Commission indicated in the application as to any matter specified therein is correct in so far as it relates to any question arising under Part I or Part II of this Schedule, except any question whether an act or event constitutes a taxable disposal in accordance with paragraph 1, paragraph 2 or paragraph 9 of this Schedule.


460
(2) On that assumption, the inspector shall issue to the Commission a certificate stating the amount of the appropriate deduction required to be made for the purpose of assessing levy in respect of the chargeable act or event in question, or (as the case may be) stating that no deduction under this Schedule is required to be made for that purpose.


465
30.—(1) Where a certificate is issued to the Commission under the last preceding paragraph—



(a) if that certificate is received by the Commission before they serve a notice of assessment of levy in respect of the levy to which the certificate relates, they shall send a copy of it with that notice to the person on whom that notice is served;


470
(b) in any other case, the Commission shall, within thirty days after receiving the certificate, send a copy of it to the appropriate person.



(2) For the purposes of the preceding sub-paragraph—



(a) if the application for a certificate was made in pursuance of a notice served under paragraph 25(6) of this Schedule, the appropriate person is the person who served that notice;


475
(b) in any other case, the appropriate person is the person appearing to the Commission to be the person who is liable to pay the levy or who, if a notice of assessment of levy in respect of the chargeable act or event in question resulted in an operative assessment of levy, would be liable to pay the levy.


480
(3) Where the Commission send a copy of a certificate in pursuance of sub-paragraph (1) of this paragraph, they shall send with it a copy of the application under paragraph 25 of this Schedule in pursuance of which the certificate was issued.


485
31.—(1) A certificate issued by an inspector under this Part of this Schedule shall be construed as having been issued on the assumption specified in paragraph 29(1) of this Schedule and shall have effect without prejudice to any question whether that assumption is correct or not.



(2) Subject to the preceding sub-paragraph, any such certificate shall be conclusive evidence of the matter stated in the certificate.



32.—(1) If, after a certificate under this Part of this Schedule has been issued,—


490
(a) any change (whether in consequence of an appeal, re-assessment or otherwise) is made in the computation of any capital gains tax or corporation tax by reference to which the inspector calculated the deduction specified in the certificate, or, as the case may be, stated in the certificate that no deduction under this Schedule was required to be made, and



(b) by reason of that change the certificate needs to be revised,


495
the inspector may withdraw the certificate and issue a revised certificate in its place.



(2) Paragraphs 29(1), 30 and 31 of this Schedule shall have effect in relation to such a revised certificate as they have effect in relation to a certificate issued under paragraph 29(2) of this Schedule.

PART V

500
SUPPLEMENTARY PROVISIONS



33.—(1) In this Schedule 'year of assessment' has the same meaning as in Part III of the Finance Act 1965 and 'company' and 'accounting period' have the same meanings as in Part IV of that Act.


505
(2) Any reference in this Schedule to chargeable gains which accrue or accrued, or would (if any specified conditions had been fulfilled) have accrued, to a person or company shall be construed as including a reference—


510
(a) to chargeable gains which, by virtue of any provisions of the enactments relating to capital gains tax or corporation tax, are deemed so to accrue or to have accrued, or which by virtue of any such provisions would (if the specified conditions had been fulfilled) have been deemed so to accrue, and

515
(b) to chargeable gains which, in the case of a person who has died, were by virtue of any provision of those enactments included in the gains accruing to him, or to the trustees of a settlement under which he was a beneficiary, in the year of assessment in which he died or would (if the specified conditions had been fulfilled) have been so included.



34.—(1) In this Schedule 'the assumed tax condition', in relation to a disposal, means the condition that none of the provisions of the Finance Act 1965 specified in the next following sub-paragraph has or had effect in relation to that disposal or in relation to the corresponding acquisition.


520
(2) The provisions of the Finance Act 1965 referred to in the preceding sub-paragraph are section 33 (replacement of business assets), paragraph 20 of Schedule 7 (which relates to disposals between husband and wife) and paragraphs 2 and 3 of Schedule 13 (which relate to transfers within a group of companies).


525
(3) In this paragraph 'disposal' means any act or event which for the purposes of any provisions of Part III or Part IV of the Finance Act 1965 constitutes a disposal, and 'the corresponding acquisition', in relation to a disposal, means the act or event whereby the person or company making, or deemed to make, the disposal acquired the interest in land to which the disposal relates or related.


530
35.—(1) In this Schedule 'inspector' has the same meaning as in the Income Tax Acts, and 'the appropriate inspector'—


535
(a) in relation to any act or event appearing to the Commission to be a taxable disposal in accordance with paragraph 1 or paragraph 2 of this Schedule, means the inspector for the district in which the chargeable gains (if any) which accrue on that disposal, or would so have accrued if the assumed tax condition had been fulfilled, would be assessable to capital gains tax or corporation tax, as the case may be, and


540
(b) in relation to any act or event appearing to the Commission to be such as is described in paragraph 9 of this Schedule, means the inspector for the district in which the chargeable gains (if any) of the taxpayer for the relevant year or period are or were, or if the assumed tax condition had been fulfilled would have been, assessable to tax.



(2) Section 3(3) of the Income Tax Management Act 1964 (which relates to the functions of inspectors) shall have effect in relation to matters arising under this Schedule as it has effect in relation to income tax.


545
36.—(1) In this Schedule, in relation to a chargeable act or event, 'the chargeable interest' and 'the chargeable owner' have the meanings assigned to them by paragraph 2(1) of Schedule 5 to this Act.


550
(2) In this Schedule 'disposition falling within the antecedent period' has the meaning assigned to it by paragraph 2(2) of that Schedule, and 'if the antecedent period had extended to the first appointed day' means if in paragraph 2(2)(b) of that Schedule the words from 'and was so made' to the end had been omitted.


555
37. Nothing in this Schedule shall be construed as indicating an intention to exclude the operation of section 19 of the Interpretation Act 1889 (whereby, unless the contrary intention appears, 'person' includes any body of persons corporate or unincorporate) in relation to any provisions of this Act.



38. In relation to any chargeable act or event falling within Case F, regulations made under this Schedule may provide that the provisions of this Schedule shall have effect subject to such modifications of any of those provisions (except paragraphs 1, 2 and 9) as may be specified in the regulations.—[Mr. Willey.]

Brought up; and read the First time.

Mr. Willey: I beg to move, That the Schedule be read a Second time.

Mr. Deputy Speaker: I suggest that it would be convenient to discuss, at the same time, the three Amendments to the new Schedule standing in the name of the hon. Member for Lewisham, North (Mr. Moyle), in line 517, leave out' none 'and insert' neither'; in line 521, after 'assets', insert 'and'; and in line 522, leave out from 'wife' to end of line 523.

Mr. Willey: We are here providing for an overlap between the levy and Capital Gains Tax, providing that if there

is such an overlap, there shall be a deduction from the levy. I emphasise again that this is a relief which we are providing in favour of the levy payer.
In view of what has been said, I am anxious to emphasise that in this case a duty will be placed on the Commission. Earlier, we were discussing an Amendment in the name of the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) in connection with Section 28 of the 1931 Act. One of the merits of that provision, to which the right hon. and learned Gentleman called our attention, is that the Commission itself will do what it can to


ensure that the levy payer has the benefit of the relief.
There are two circumstances—and, in a sense, these are transitional provisions—in which, on the first chargeable act or event for levy after the first appointed day, it is possible for the levy and Capital Gains Tax both to bite on the same increase in value. There is also a third case where, although there is not strictly an overlap, the Government consider that an allowance should be made. The new Schedule is concerned with providing for relief from Capital Gains Tax where these conditions obtain.
The first condition exists where, for the purposes of levy, the base value—that is, under Schedule 5—is the consideration for a disposition in the antecedent period. No adjustment is practicable in those cases for changes in current use value since the date of the earlier disposition and it is possible, therefore, that the levy will bite on an increase in the current use value, which is also subject on the same occasion to Capital Gains Tax.
That is the first case. The second is the one where there is strictly no overlap, but where the land was bought during the interim period at a price including development value and which, but for the ineligibility of disposition through this period, would have been used for a base value under Schedule 5. For the chargeable act or event after the appointed day, the levy might be taken on the already paid development value and may also be liable for Capital Gains Tax on the same occasion; and the Government think it right to give relief in that case. The circumstances surrounding these two cases are set out in Part I of the new Schedule.
The third case arises where it was a disposal on death, by way of gift, or in relation to a settled property, before the appointed day, which was a chargeable occasion for Capital Gains Tax, but which was not a disposition for valuable consideration and, therefore, cannot provide a base value for the levy. In this case, relief will be given. These circumstances are set out in Part II of the new Schedule.
Part III is concerned with calculating the amount of deduction to be made for

Capital Gains Tax. The formula may appear to be complicated, but in principle it is very simple. It is this. Capital Gains Tax is applied to net gains arising in the year of assessment, and that is not concerned with individual gain separately. It may not operate at the flat rate of 30 per cent.; in many cases the estimate is made on an alternative basis, relating to Income Tax and Surtax rates, where this is in the interests of the taxpayer. The principle applied, as in the previous Schedule, is known as the "top slice of income" principle. The effect is that relief is given as though the particular disposal had been the last gain to be made in that year and was, therefore, taxed at the highest rate applicable. When the allowance has been made in respect of more than one disposal it is calculated as though these were successive slices from the top. In other words, the calculation gives the maximum possible relief to the levy-payer.
Relief is given in circumstances where, because of the operation of the provisions of the Finance Act, which are referred to in paragraph 34 of the Schedule, Capital Gains Tax may not be charged for the year of assessment, but liability for tax is postponed to some future occasion. Relief is then given on the notional tax taken to have been chargeable. This effect is achieved by the "assumed tax condition".
Part IV of the Schedule is concerned with procedure. The basis for any certificate depends upon the satisfaction of certain conditions in the assessment of levy. The Commission must apply to the inspector of taxes for a certificate describing the conditions on which the inspector is to base his certificate. These assumptions can be challenged in the course of the assessment of levy. The inspector's certificate based on the assumptions given, is a matter of simple arithmetic in the light of factors which will have been determined and been open to appeal in the course of determining the tax liability of the levy-payer or his predecessor. Since these factors are open to challenge in other ways, the inspector's certificate is made conclusive.
Part V of the Schedule is concerned solely with interpretation.
What we have endeavoured to do is to deal with the three cases in which there


is an overlap or there might be harshness if we did not make such allowances, and to be as favourable as we can to the levy-payer.
I have noticed the Amendments to the Schedule and I can say that I would be happy to accept them. They would provide for a reconciliation between this Schedule and Schedule 9.

Mr. Graham Page: Until the Minister started on this Schedule we had the Chief Secretary to the Treasury here, and I thought that he was attending specifically for this Schedule, because it deals with Capital Gains Tax and Corporation Tax, which is "just up his street". We have been asking all day for a Treasury Minister to attend the debate to assist us and I am very disappointed to have to say that just at the moment when he might have been of some use to the Minister and to hon. Members on this side of the House the right hon. Gentleman chose to leave.
We are being asked in these 12 pages of Schedule to assume that in nearly 12 months' time there will be some other legislation on the Statute Book, which will make certain provisions. The whole of this Schedule depends upon whether the Capital Gains Tax is altered in the next Finance Bill.
The Schedule is based on an assumption that after the Finance Bill becomes an Act in 1967, Capital Gains Tax will be charged at an increase in current use value only. This is putting the legislation of this House into a completely nonsensical position. Why could we not have had this in the Bill? Why could we not have had the alteration to Capital Gains Tax here and now, so that we are not legislating in a vacuum?
11.45 p.m.
We are legislating by this Schedule, if it is now passed. It is not even postponed to come into operation when the Finance Bill, 1967, gets the Royal Assent. We are merely assuming, and this is a grossly impertinent assumption by any Government, that the House will pass some law some nine or ten months hence. I protest most strongly that we should have to consider this Schedule on the basis of not knowing how the next Finance Bill will be worded, and when we are told to assume that the Finance Act, 1967, will

provide for Capital Gains Tax and Corporation Tax to bite only on an increase in current use value, and, therefore, leave the levy to be imposed on an increase in net development value. I suppose we must assume that, if we are to debate this Schedule at all as, otherwise, it is purposeless and meaningless. But it does not appear from the Schedule itself, or from anything that has been before the House in any formal manner, even tonight.
I happen to know it, because the Minister was courteous enough to write me a letter about a fortnight ago and explain the position to me, but as my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) has said, this is legislation by correspondence—government by correspondence. I would not have understood a word of this Schedule if it had not been for the courtesy of the Minister in telling me that he hopes that the Labour Government will still be in office at the time of the next Budget, that there will still be a Socialist Chancellor of the Exchequer to bring in a Finance Bill, and that in that Bill an unknown provision—unknown in words—will provide for Capital Gains Tax to apply only to current use value, and that that will pass through the House.
I am sorry if I have spent some time on that aspect, but it is a protest that should be made because it goes to the very base of the Schedule. We have 12 pages of closely printed and extremely difficult matter—I hear a more expressive description coming from the benches behind me. We are asked to discuss the Schedule on an assumption of some other law and some other Act at a future date.
The Minister has explained to the House the skeleton, if I may say so, of the Schedule. He has told us that when we have a new law under the Finance Act, 1967, there may be an overlap between the levy and the Capital Gains Tax; that where, for example, with the first case he gave, the levy has been calculated on the consideration in the last conveyance, the base value is taken as the sale and purchase price for the last conveyance and that happened in the antecedent period before 23rd September, 1965, there might well be an overlap because Capital Gains Tax will have been charged based on April, 1965.
The Minister gave the second case, where someone has bought property


during the interim period between 23rd September, 1965, and an appointed day on 1st March, 1967. Again, if Capital Gains Tax has been paid I presume that it may have taken into account some of the net development value for the period.
This is where we come up against it again. It must be assumed that any gain on property during this time is divided into these two factors—current use value and any development value—and that, if Capital Gains Tax has been paid as the law stands at present, it may have been paid on net development value which will eventually be subject to levy.
The third case given by the Minister was a gift before the appointed day or a settlement before the appointed day.
The Minister presented those three cases to the House. I admit that I cannot say whether there are any more cases. I am sure that my right hon. and hon. Friends are interested in the fact that there are three cases but cannot tell me whether there are any more cases which the Minister should deal with. How are we to know that the Minister has dealt in these 12 pages of Schedule with all the cases which need to be dealt with without a far closer scrutiny on the Schedule and the subject with which it tries to deal?
Part II describes how the appropriate deduction is calculated. I do not understand this, because in the end one gets a certificate of what the appropriate deduction is. Is this a direction in Part III to the citizen as to how he should calculate the appropriate deduction, or is this a direction to the Treasury officials as to how to do it? I do not know. In the end, one gets a certificate which is partially conclusive and partially not conclusive. The Schedule finishes with a couple of pages of interpretation.
Although the Minister has given us this skeleton and given us some understanding of what he hopes is done by the Schedule, there is a great deal of detail. We are precluded from dealing with this in detail because of the lateness of its appearance on the Notice Paper. I was shocked when the Parliamentary Secretary told one of my hon. Friends that he was taking advantage of him in referring to details in the Schedule. How

much advantage has been taken of us by putting these Schedules on the Notice Paper at this late hour. I have tried to extract the principles. It is bad legislation, in that it is trying to anticipate other legislation. It is bad mathematics in dividing up the gains from property into two factors, charging tax on one of those factors and a levy on the other. I do not know how on earth anybody is to work it out.

Mr. Roland Moyle: I, too, am rather sorry that my right hon. Friend the Chief Secretary to the Treasury is no longer with us. If he had been here, I should have liked to have told him that, as a result of my brief encounter on the Bill, I look forward to next year's Finance Bill with feelings of pleasurable anticipation as a delectable morsel to be consumed in the small hours of a summer morning next year.
My Amendments are to leave out "none" and insert 'neither' in line 517; to insert 'and' after 'assets' in line 521; and in line 522 to leave out from 'wife' to the end of line 523. All three are designed to achieve the same object of reconciling this new Schedule with Government Amendment No. 177, which is to insert a new Part I to Schedule 9.
The point arises in the first instance from the transitional provisions which will be necessary in the period from the first appointed day to the time of the first sale of a piece of land, when the Capital Gains Tax, Corporation Tax and the levy might be levied in some cases on the same increment in value. It is intended that the betterment levy will be reduced by the amount of the Capital Gains Tax which would be paid.
It also arises from the point that there are three cases in which Capital Gains Tax is postponed; transfers between husband and wife; where there is sale of a business and the money is reinvested in a similar business; and where there is transfer of property between companies of the same group. The tax is postponed, with the possibility that it may be paid later. The object of paragraph 34 is to provide that where that occurs the levy will be reduced by the amount of the Capital Gains Tax which would have been levied had the provisions for postponement not applied.
If the House adopts it, the new Part I of Schedule 9 will provide that disposals between members of a group of companies shall not be chargeable acts for the purposes of the levy. In other words, the matter will be taken care of in another part of the Bill, and therefore paragraph 34, in so far as it refers to transfers between companies who are part of the same group is superflous. I should have thought that that in itself was a good reason for making the Amendments standing in my name.
But this is not just a tidying-up exercise. If the provision is left in the new Schedule and the circumstances when the land was disposed of outside a group of companies after the first appointed day were such that there would be an entitlement to reduction for corporation tax, the deduction would, without this change, be limited to the disposal out of the group of companies and not to the increment in value which had occurred from when the property first came into the group's possession. I should have thought that the Amendments were not objectionable to right hon. and hon. Gentlemen opposite. I am glad that my right hon. Friend sees fit to accept them, and I hope that the House will adopt them.

Mr. Costain: I congratulate the hon. Member for Lewisham, North (Mr. Moyle) for being the first hon. Member on the back benches opposite to speak on the Report stage of the Bill today. I shall be out of Order if I refer to the fact that we only wish that he had been here to support us during our appeals for charities, because he seems to have better ability to persuade the Minister than we have.
When the Minister said that the Schedule had been put in to help the taxpayer I was reminded of my form-master, who every time he caned me assured me that it hurt him more than it hurt me. I feel the same in some ways when the Minister talks about the Schedule. My hon. Friend the Member for Crosby (Mr. Graham Page) has referred to the fact that the Schedule's main point is to tie up with some future Finance Bill. We are getting used to this hopscotch legislation, when every Bill of any importance before the House on taxation and finance depends on another Bill which we do not know anything about. However, as the Government have at least got nine months

properly to conceive the next Finance Bill we should get something a little more legitimate than this one.
12 m.
Some of the more optimistic people who read these Schedules have a glimmer of hope that the Schedule is meant to imply that the Government do not intend to introduce double taxation on land. If the Minister will give us an assurance on the point, it will be most helpful, as some optimists believe that to be so. But then comes the problem when we tie the provisions of this Schedule in with the Corporation Tax. It is a complicated point—the whole thing is complicated—and perhaps I may spell it out.
It is understood that an element of double taxation will occur even in straightforward cases. In cases where betterment levy would arise from dealing in land within 12 months, thereby giving rise to assessment under Case VII of Schedule D, there is, apparently, a double charge to tax. This arises because the betterment levy is not credited in full against the Corporation Tax liability but is merely a deduction in arriving at the profit chargeable to Corporation Tax.
Where this condition arises, the liability to betterment levy and Corporation Tax will total 64 per cent. When the remaining 36 per cent. is distributed, a liability to Income Tax of a further 14·85 per cent. will arise, giving a total liability of no less than 78·85 per cent. Surely, it cannot be even this Government's intention that that rate of taxation should arise on any land deals.
I do not expect the Minister to be able to give a detailed answer on the point. I shall not press him on it, but I want an assurance: is it the Government's intention to avoid double taxation on deals of this sort, and will he have a word with the Chancellor of the Exchequer—who ought to be here anyway—to ensure that these matters are properly considered when the next Finance Bill comes along?

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

Mr. Robert Cooke: I am immensely flattered to find so many hon. Members here to listen to me. Before they leave


the Chamber, I wish to assure them that their removal from places of refreshment had nothing to do with me. It was merely my rising to my feet to speak which seemed to move one of my hon. Friends to call a Count.
I want to ask two questions, not to make a speech. In view of the trouble over double taxation, may we have a Double Taxation (United Kingdom) Relief Order, 1967?
Second, I would like an assurance from the Minister. Will he undertake to deposit in the Library all documents issued to hon. Members in response to questions during these debates which he has not been able to answer here but has said he will answer in correspondence afterwards? If we are to have government by administration, correspondence or whatever it may be, at least the people, through other Members of Parliament, should have a chance to know what this is all about, and that knowledge should not be restricted to the few hon. Members who have the privilege and pleasure of reading the Minister's replies sent personally to them.

Mr. Willey: To reply to the hon. Member for Bristol, West (Mr. Robert Cooke), who seemed surprised when so many came in to hear what he was telling us, as far as I am aware I have not given any assurances at all about corresponding with any hon. Member, but if I find, on looking at HANSARD, that I am in error in my recollection I will certainly see that the hon. Gentleman is informed.

Mr. Robert Cooke: The right hon. Gentleman will appreciate that every Minister answers for every other Minister and that Ministers of the Crown are as one when facing the House of Commons. The right hon. Gentleman's hon. Friend the Parliamentary Secretary has given at least two assurances this evening on this point. Will the Minister see that his Department, or whoever made the promise, has these papers deposited in the Library?

Mr. Willey: My hon. Friend the Parliamentary Secretary has heard the hon. Gentleman and I am sure that he will undertake to do what I would have undertaken to do in similar circumstances and will let the hon. Gentleman have a copy if the hon. Gentleman with whom

he said he would correspond has no objection.

Mr. Robert Cooke: I thank the right hon. Gentleman for giving way, but it is not as easy as this. The Minister answering for the Department of the right hon. Gentleman has told the House that he cannot answer questions in detail from the Dispatch Box. He said he will send an answer through the post, and will correspond with an hon. Gentleman on this side. But the hon. Gentleman on this side was asking the question on behalf of all hon. Gentlemen on this side, and for all I know, hon. Members who are not in the House, too. Could we have an assurance that these papers will be deposited in the Library?

Mr. Willey: I do not think that there is any need for such an assurance. I have given a very fair assurance to the hon. Gentleman and it is up to him to pursue the matter, if he feels he ought to pursue it, by Question or in some other way. But since he feels that he should be a party to the correspondence between my hon. Friend and his hon. Friend, he shall be informed of it.
I would like to reply to the hon. Member for Crosby (Mr. Graham Page), who made the point about legislation or government by correspondence. But he will remember that I did, in fact, say in the Standing Committee that provision would be made about Capital Gains Tax in the Finance Bill.
The hon. Gentleman queried the assumption on which I should make such a statement, but I do not think that there is any question about the fact that the next Finance Bill will be introduced by the present Government, and that this undertaking will be fulfilled.
The hon. Gentleman asked a fair enough question. He said, "You have found two cases of overlapping and one case for which you have made provision" and admitted that he was unaware of any other cases. I, too, am unaware of any other cases. We have thoroughly considered the possibility of other cases and if there were any further cases we would have dealt with them. As I have assured the House we have endeavoured to be as fair as we possibly can to the taxpayer who is also a levy-payer.
The hon. Gentleman asked about the certificate and the importance of the provisions we are making in this Schedule. Of course, the importance of these provisions is that they guide and bind the inspector of taxes and also, of course, they place a duty on the Commission. It is important that if we are making provision for relief like this we should go to these pains meticulously to bind the inspector so that we can ensure in every case where there is overlap not only that allowance is made for the overlap, but that the extent of the overlap is properly calculated.
I am obliged to my hon. Friend the Member for Lewisham, North (Mr. Moyle). As I said, the Government will be happy to accept his Amendments.

Question put and agreed to.

Schedule read a Second time.

Mr. Deputy Speaker (Sir Eric Fletcher): There are Amendments in the name of the hon. Member for Lewisham (Mr. Moyle). I take it that in the hon. Member's absence the Minister will formally move them.

Mr. Willey: Mr. Willey indicated assent.

Amendments made: In line 517 of the proposed Schedule, leave out 'none' and insert 'neither'.

In line 521, after 'assets', insert 'and'.

In line 522, leave out from 'wife' to end of line 523.—[Mr. Willey.]

Schedule, as amended, added to the Bill.

New Schedule.—(DEATH, BANKRUPTCY, WINDING UP AND FLOATING CHARGES.)

PART I

GENERAL PROVISIONS

1. In this Schedule 'person prospectively liable for levy'—

(a) in relation to a chargeable act or event falling within Case A, Case B or Case E, means the grantor;
(b) in relation to a chargeable act or event falling within Case C, means a person who is the developing owner in relation to the relevant project or (if he is not the developing owner in relation to it) is on the relevant date entitled to an assessable interest in the relevant land or in part of that land;
(c) in relation to a chargeable act or event falling within Case D, means the person to whom the right to compensation accrues; and

(d) in relation to a chargeable act or event falling within Case F, means such person as for the purposes of this paragraph may be prescribed by the regulations made under section (Levy in Case F) of this Act.

2. For the purposes of the application of this Schedule to a chargeable act or event falling within any Case other than Case C, 'the levy' means levy chargeable in respect of that act or event and 'the chargeable interest' has the meaning assigned to it by paragraph 2(1) of Schedule 5 to this Act.

3. For the purposes of the application of this Schedule to a chargeable act or event falling within Case C, 'the levy', in relation to any person prospectively liable for levy in respect of that act or event, means levy chargeable in that Case in respect of any assessable interest by virtue of which he is the developing owner in relation to the relevant project or (if he is not the developing owner in relation to it) means levy chargeable in that Case in respect of any assessable interest in the relevant land, or in part of that land, to which he is entitled on the relevant date, and 'the chargeable interest, in relation to the levy, means the assessable interest in respect of which the levy is so chargeable.

4.—(1) In this Schedule 'net capital proceeds'—

(a) in relation to a chargeable act or event consisting of a disposition falling within Case A, Case E or Case F, means the consideration given for the disposition, reduced by the amount of any costs which are incurred by the person making the disposition and are incidental costs to him of making it or of making any contract in pursuance of which it is made;
(b) in relation to a chargeable act or event consisting of a disposition falling within Case B, means all premiums or other capital sums which are paid as consideration for the disposition or which in accordance with the terms of the tenancy are payable to the landlord at any time during the tenancy, reduced by the amount of any such costs as are mentioned in the preceding sub-paragraph; and
(c) in relation to a chargeable act or event consisting of the accrual of a right to compensation falling within Case D or Case F. means the compensation paid in respect of that right.

(2) For the purposes of the preceding subparagraph the incidental costs to a person of making a disposition or contract shall be taken to consist of—

(a) expenditure wholly or exclusively incurred by him for the purposes of the disposition or contract, being fees, commission or remuneration paid for the professional services of any surveyor or valuer, or auctioneer, or accountant, or agent or legal adviser;
(b) any stamp duty payable by him on the disposition or contract;
(c) any costs of advertising to find a purchaser or tenant; and
(d) any costs reasonably incurred by him in obtaining any valuation or apportionment relevant for the purpose of assessing


levy in respect of the chargeable act or event in question.

PART II

DEATH

Death on or after relevant date

5.—(1) Where a chargeable act or event occurs, and a person prospectively liable for levy in respect of it (in this paragraph referred to as 'the deceased') dies on or after the relevant date but before a notice of assessment of levy has been served on him in respect of the chargeable interest, then, subject to the next following sub-paragraph, a notice of assessment of levy in respect of that interest may be served on his presonal representatives.

(2) The preceding sub-paragraph shall have effect subject to subsections (4) and (5) of section 44 of this Act; and, without prejudice to those subsections, a notice of assessment of levy served by virtue of this paragraph shall not have effect if it is served more than three years after the death of the deceased.

(3) For the purposes of this paragraph (and without prejudice to any question arising otherwise than under this Part of this Schedule) a person who has been a personal representative of the deceased shall not be taken at any time after the death of the deceased to have ceased to be such a personal representative by reason only that, apart from the levy, the administration of the estate of the deceased has been completed before that time.

6. Where a person prospectively liable for levy in respect of a chargeable act or event dies after a notice of assessment of levy has been served on him in respect of the chargeable interest, but before that notice has resulted in an operative assessment of levy, anything which, in accordance with Part III of this Act, would if he had not died have fallen to be done by or in relation to him in connection with the levy may be done or (if it has been begun) may be continued by or in relation to his personal representatives.

7.—(1) Where a person prospectively liable for levy in respect of a chargeable act or event dies on or after the relevant date, and a notice of assessment of levy served in respect of the chargeable interest has resulted in an operative assessment of levy, any sum recoverable by the Commission in respect of the levy shall (subject to the next following sub-paragraph) be treated for all purposes as if it had been a debt due from him to the Commission which accrued immediately before his death.

(2) Nothing in the preceding sub-paragraph shall operate so as to enable any sum to be recovered by the Commission before the date on which it accrues due in accordance with section 50 of this Act, or so as to require interest on any sum to be calculated otherwise than in accordance with section 51 of this Act.

8.—(1) The provisions of this paragraph shall have effect for the purposes of the application of the preceding provisions of this Part of this Schedule to a chargeable act or event consisting of a disposition on the

acquisition of an interest in land (whether compulsorily or by agreement) by the Commission.

(2) In relation to any time on or after—

(a) the date on which an agreement for making the disposition is made, or
(b) the date which (whether by virtue of the execution of a general vesting declaration or otherwise) is the date of service of a notice to treat for the acquisition of that interest by the Commission.

but before the disposition is made, it shall, for the purposes of any of the preceding provisions of this Part of this Schedule and for the purposes of Part I of this Schedule as it has effect for the purposes of any of those provisions, be assumed that the disposition will be made on the date on which subsequently it is in fact made.

(3) In relation to any such time, paragraph 5(1) of this Schedule shall have effect as if, for the words 'occurs', there were substituted the words 'is about to occur'.

Chargeable act or event occurring during administration of estate of deceased person

9.—(1) The provisions of this paragraph shall have effect where the personal representatives of a deceased person (in this paragraph referred to as 'the deceased ') are persons prospectively liable for levy in respect of a chargeable act or event—

(a) by reason of anything done by them in their capacity as his personal representatives, or
(b) by reason of any right accruing to them in that capacity, or
(c) in Case C, by reason of an interest in land, or the benefit of a contract, which has become vested in them in that capacity.

(2) If in the circumstances specified in the preceding sub-paragraph a notice of assessment of levy served in respect of the levy has resulted in an operative assessment of levy,—

(a) any sum recoverable by the Commission in respect of the levy shall (subject to the next following sub-paragraph) be treated for all purposes, except for the purposes of estate duty, as if it had been a debt due from the deceased to the Commission which accrued immediately before his death, and
(b) any such sum shall not be recoverable by the Commission from the personal representatives otherwise than as being such a debt due to the Commission from the deceased.

(3) Nothing in the last preceding sub-paragraph shall operate so as to enable any sum to be recovered by the Commission before the date on which it accrues due in accordance with section 50 of this Act, or so as to require interest on any sum to be calculated otherwise than in accordance with section 51 of this Act.

(4) Section 27 of the Trustee Act 1925 (protection by means of advertisements) shall not have effect in relation to any claim of the Commission in respect of any sum which, in


the circumstances specified in sub-paragraph (1) of this paragraph, is recoverable by them in respect of the levy.

10.—(1) If apart from this paragraph the Probate Judge would be a person prospectively liable for levy by reason that an interest in land, or the benefit of a contract, to which a person was entitled immediately before his death has become vested in the Probate Judge by operation of law, section 36 of this Act shall not have effect in relation to the Probate Judge in respect of the levy; and, if letters of administration of that person's estate are granted,—

(a) his personal representatives shall be treated as persons prospectively liable for levy in respect of the chargeable interest and the provisions of this Act relating to notices of assessment of levy shall apply accordingly, and
(b) sub-paragraphs (2) to (4) of the last preceding paragraph shall apply as they would apply in the circumstances specified in sub-paragraph (1) of that paragraph.

(2) In this paragraph 'the Probate Judge' has the same meaning as in the Administration of Estates Act 1925.

11.—(1) Where a person (in this paragraph referred to as 'the deceased') who has served a notice under section 38 of this Act in respect of a project of material development dies before the date on which the carrying out of the project is begun, and he would have been the developing owner in relation to that project if he had still been living on that date, then for the purposes of Part III of this Act he shall be deemed to have been the developing owner in relation to that project; and section 32(7) of this Act shall have effect accordingly as if the deceased had been living on that date.

(2) For the purposes of the preceding subparagraph it shall be assumed that, if the deceased had still been living on the date on which the carrying out of the project is begun,—

(a) he would on that date still be entitled to any interest in the land comprised in the project, or in part of that land, to which he was entitled at the time when he served notice of intention to carry it out, and
(b) he would on that date still be under any contract relating to that land, or part of it, to which he was subject at that time.

PART III

BANKRUPTCY

Receiving order made or sequestration awarded after relevant date

12. Where a person prospectively liable for levy in respect of a chargeable act or event has a receiving order made against him in England or Wales on or after the relevant date and he is adjudged bankrupt, or where such a person has an award of sequestration made against him in Scotland on or after the relevant date,—

(a) any sum recoverable by the Commission in respect of the levy shall constitute a debt provable in his bankruptcy,

if apart from this paragraph it would not constitute a debt so provable, and
(b) if the receiving order or the award of sequestration is made not more than twelve months after the relevant date, any sum so recoverable shall be deemed to be included among his debts specified in section 33(1) of the Bankruptcy Act 1914 or section 118(1) of the Bankruptcy (Scotland) Act 1913 (priority of debts).

Relevant dale after receiving order but before adjudication

13.—(1) Where, in England or Wales, a person prospectively liable for levy in respect of a chargeable act or event has had a receiving order made against him before the relevant date, and is adjudicated bankrupt on or after that date, any sum recoverable by the Commission in respect of the levy shall (notwithstanding anything in section 30 of the Bankruptcy Act 1914) constitute a debt provable in his bankruptcy.

(2) For the purpose of recovering any such sum the Commission shall, in priority to all other debts provable in the bankruptcy, have a first charge on so much of the net capital proceeds (if any) of the chargeable act or event in question as is received by the official receiver or the trustee in bankruptcy as money divisible among the unsecured creditors of the bankrupt.

Chargeable act or event occurring after adjudication or sequestration

14.—(1) The provisions of this paragraph shall have effect where the trustee in bankruptcy of a bankrupt is a person prospectively liable for levy in respect of a chargeable act or event—

(a) by reason of anything done by him in his capacity as trustee in bankruptcy of the bankrupt, or
(b) by reason of any right accruing to him in that capacity, or
(c) in Case C, by reason of an interest in land, or the benefit of a contract, which has become vested in him in that capacity.

(2) If in the circumstances specified in the preceding sub-paragraph a notice of assessment of levy served in respect of the levy has resulted in an operative assessment of levy,—

(a) any sum recoverable by the Commission in respect of the levy shall (notwithstanding anything in section 30 of the Bankruptcy Act 1914) constitute a debt provable in the bankruptcy, and
(b) any such sum shall not be recoverable from the trustee in bankruptcy otherwise than as being such a debt due to the Commission from the bankrupt.

(3) For the purpose of recovering any such sum the Commission shall, in priority to all other debts provable in the bankruptcy, have a first charge on so much of the net capital proceeds (if any) of the chargeable act or event in question as is received by the trustee in bankruptcy as money divisible among the unsecured creditors of the bankrupt.

Composition or scheme or deed of arrangement

15.—(1) The provisions of paragraph 14 of this Schedule shall have effect in relation to a trustee appointed under or in pursuance of a composition or scheme or deed of arrangement as they have effect in relation to a trustee in bankruptcy.

(2) Without prejudice to the preceding subparagraph, where—

(a) a trustee appointed under or in pursuance of a composition or scheme or deed of arrangement is a person prospectively liable for levy in respect of a chargeable act or event, and
(b) the composition or scheme is annulled, and the debtor again adjudged bankrupt, under section 21(3) of the Bankruptcy Act 1914, or the composition or deed of arrangement is superseded by an award of sequestration,

sub-paragraphs (2) and (3) of paragraph 14 of this Schedule shall have effect in relation to any sum recoverable by the Commission in respect of the levy as if in that paragraph any reference to the trustee in bankruptcy included a reference to the trustee under the composition, scheme or deed.

Power for official receiver or trustee in bankruptcy to act in relation to levy

16. Where a notice of assessment of levy is served on a person prospectively liable for levy, and a receiving order or award of sequestration—

(a) has been made against him before the service of that notice, or
(b) is made against him after the service of that notice but before it has resulted in an operative assessment of levy,

anything which, in accordance with Part III of this Act, would fall to be done by or in relation to him in connection with the levy may be done or (if it has been begun) may be continued by or in relation to the official receiver or (if he has been adjudged bankrupt or sequestrated) his trustee in bankruptcy.

PART IV

WINDING UP AND FLOATING CHARGES

General provisions as to winding up

17.—(1) Where a company is a person prospectively liable for levy in respect of a chargeable act or event, and the company is wound up, whether compulsorily or otherwise, any sum recoverable by the Commission in respect of the levy shall constitute a debt provable in the winding up, if apart from this paragraph it would not constitute a debt so provable.

(2) If the date which is the relevant date for the purposes of section 319 of the Companies Act 1948 (preferential payments) is after, but not more than twelve months after, the date which is the relevant date for the purpose of assessing the levy, any sum so recoverable shall be deemed to be included among the debts of the company specified in subsection (1) of that section.

(3) If the date first mentioned in sub-paragraph (2) of this paragraph is not after the relevant date, then for the purpose of recovering any sum recoverable by the Commission in respect of the levy the Commission shall, in priority to all other debts provable in the winding up, have a first charge on so much of the net capital proceeds (if any) of the chargeable act or event in question as is received by the company, by an official receiver or by a liquidator as money divisible among the unsecured creditors of the company.

Provisions where property vested in liquidator

18.—(1) The provisions of this paragraph shall have effect where, in pursuance of an order made under section 244 of the Companies Act 1948 (vesting of property of company in liquidator), all or any part of the property of a company has vested in the liquidator of the company, and the liquidator is a person prospectively liable for levy in respect of a chargeable act or event—

(a) by reason of anything done by him in his capacity as liquidator of the company, or
(b) by reason of any right accruing to him in that capacity, or
(c) in Case C, by reason of an interest in land, or the benefit of a contract, which has become vested in him in that capacity.

(2) If in the circumstances specified in the preceding sub-paragraph a notice of assessment of levy served in respect of the levy has resulted in an operative assessment of levy,—

(a) any sum recoverable by the Commission in respect of the levy shall constitute a debt provable in the winding up of the company, if apart from this paragraph it would not constitute a debt so provable, and
(b) any such sum shall not be recoverable from the liquidator otherwise than as being such a debt due to the Commission from the company.

(3) For the purpose of recovering any such sum the Commission shall, in priority to all other debts provable in the winding up, have a first charge on so much of the net capital proceeds (if any) of the chargeable act or event in question as is received by the liquidator as money divisible among the un secured creditors of the company.

Property of company subject to debentures secured by floating charge

19. Where a company registered in England is a person prospectively liable for levy in respect of a chargeable act or event, and a receiver is appointed on behalf of the holders of any debentures of the company secured by a floating charge, or possession is taken by or on behalf of those debenture holders of any property comprised in or subject to the charge, then if—

(a) the date of the appointment of the receiver, or of possession being so taken, is after, but not more than twelve months after, the date which is the relevant date for the purpose of assessing the levy, and


(b) at the first-mentioned date the company is not in course of being wound up.

section 94 of the Companies Act 1948 (payment of certain debts out of assets subject to floating charge in priority to claims under the charge) shall have effect in relation to any sum recoverable by the Commission in respect of the levy as if that sum were included among the debts specified in section 319(1) of that Act.

Interpretation

20. In this Part of this Schedule 'company' and 'debenture' have the same meanings as in the Companies Act 1948.—[Mr. Willey.]

Brought up, and read the First time.

Mr. Willey: I beg to move, That the Schedule be read a Second time.
This new Schedule, combined with its associated Amendments, groups together in one convenient place the provisions relating to death and insolvency and deletes the existing provisions from the various parts of the Bill where they appear. This will make the provisions much easier for practitioners. The new Schedule also adds certain provisions relating to the liability of personal representatives, trustees in bankruptcy and liquidators for payment of levy.
It is necessary to add these provisions both for clarity and to protect the representatives or trustees from personal liability, as well as to protect, in some cases, creditors who might otherwise have suffered from the Commission's prior claims. The combined effect of all these Amendments is to reduce the Commission's priority and not, as the hon. Member for Crosby (Mr. Graham Page) has said, to increase it.
Part I of the new Schedule is general and applies both to death and to insolvency. It takes up various definitions and defines the sum which, in the case of insolvency, the trustee in bankruptcy, official receiver or liquidator will have in his hands from the disposal of an asset and on which the Commission has first claim for levy.
Part II deals with death. Broadly speaking, it makes it clear that acts done by, or in relation to, the deceased continue to be valid and that the personal representatives step into the shoes of the deceased. It limits, however, the liability of the personal representatives for payment of levy to the assets of the estate of which they are the representatives and protects them from a further personal liability. It ensures that a notice

of assessment must be served within three years of death so that the estate can be wound up reasonably quickly. It also makes provision for intestacy.
Part III deals with bankruptcy. Again, the objects of this Part of the Schedule are to ensure that the trustee in bankruptcy steps into the shoes of the bankrupt and that the trustee is protected from personal liability. There is an important further point, however, which applies both here and in Part IV, which deals with the winding up of companies. Without the provisions of the Schedule, it might be held that payment of levy on the disposal of an asset by a trustee or a liquidator was an expense incurred in the administration of the bankruptcy or winding up.
If this were the case, the Commission would be entitled to collect levy in priority to any other unsecured creditors to the whole of the value of the bankrupt's estate or the assets of the company. Where the asset disposed of had been mortgaged up to the hilt, this might prove very unfair on small creditors in the bankruptcy or winding up.
The provisions of Parts III and IV ensure, therefore, that the Commission's priority is limited to the proceeds which the trustee in bankruptcy, official receiver or liquidator receives from the disposal of the asset. If the net capital proceeds are insufficient to meet the levy payable, the Commission will share pari passu with the creditors in the remaining assets. This is a substantial protection for the citizen.
Part IV applies the same principles to winding up that Part III does to bankruptcies.

12.15 a.m.

Mr. Graham Page: We are obliged to the Minister for his rather rapid explanation. He was getting me out of breath when he read his brief at that speed. I wish that he would remember that what he says has not only to get out of his head, but into our heads on this side of the House.
There are one or two points about the Schedule which seem to give the Commission unnecessary preference, particularly over the ordinary creditors. I understand that the Commission would have no security over a property which


may be subject to the levy or to the proceeds from that property, or can the trustee in bankruptcy, the administrator of an insolvent estate or the liquidator of a company follow the proceeds and have some security over them?
There may be two different circumstances here. Suppose, for example, that a bankrupt had started a project of material development on a property and had been assessed to levy on that development. It relates to a specific property which still remains in the bankrupt's hands when he goes bankrupt. Has the Commission any right against that property itself, or does it come in with the general creditors?
We know that the Commission has preference over the ordinary creditors and is a preferential creditor. To that extent, it may be that, by taking the levy, the Commission can deprive the ordinary creditors of any share in the estate. Is it also a secured creditor over any part of the estate?
I thought that I detected a tone of some pride in the right hon. Gentleman's voice when he said that the Commission would be obliged to serve a notice of assessment within three years. But the levy is collectable almost immediately it is assessed. Again taking the bankrupt as an example, his estate would have to pay the Commission the levy in priority to other preferential creditors without any period of time. The trustee or the administrator of the estate may be forced by the Commission to wait three years before he can clear up the estate. The trustee or administrator cannot force the Commission to settle the matter at an earlier stage.
May I refer to Paragraph 9, subparagraph (4), which relates to the administration of the estate of a deceased person? The normal practice of an administrator or executor wishing to clear up an estate is to advertise for any outstanding creditors. If he does that in the form required by Section 27 of the Trustee Act, 1925, and allows the time to pass for claims to be made, he gets a clearance and is not responsible for any claim which may come in after that. Why should these be wiped out so far as the Commission is concerned? Why should the Commission be in this favoured position when, if a trustee has done his advertising under the Trustee

Act, 1925, he is still not protected against any claim from the Commission? That is quite an unnecessary preference for the Commission.
The following Clause, No. 10, shows the trouble one can get into with any levy of this sort. When the person concerned dies intestate, his property vests, until letters of administration are granted, in the President of the Probate, Divorce and Admiralty Division, and there had to be a special provision in the Schedule to ensure that the President of the Probate, Divorce and Admiralty Division was not assessed to levy. It shows the stupidity of this sort of Schedule.
The Minister referred to the Clauses giving the Commission preference over ordinary creditors. I see no reason why the Commission should have that preference. It is a commercial concern trading in land, and it should take its place with other commercial undertakings and not be in the same position as the Crown collecting taxes. Again and again the Minister has told us that this is not a tax. It is a tax for some purposes, when it suits the Minister's, and not for others, and it should no t have the tax preferences in this Schedule.

Mr. Clegg: I shall not detain the House for long, but my eyes were irresistibly drawn to paragraph 19, which says:
Where a company registered in England is a person prospectively liable for levy…
Does this mean it refers only to companies such as Ken Dodd Limited, or is it a term of art which embraces all companies which are prospectively liable for levy?
This Schedule, as all the Schedules in the Bill, is complex and it will take a lot of understanding. I wonder what sort of intelligence test the Minister is applying to those civil servants who will have to understand and administer it, and what sort of training schedule he has in hand for the Commission to use in training its staff to understand it. Added to that, will they be provided with full reports of the Committee and Report stages of the Bill, so that they will have the Minister's commentaries on what he thinks the Bill means?

Mr. Robert Cooke: My hon. Friend the Member for Crosby (Mr. Graham Page), if I understood him aright, was claiming that


the Commission had special privileges. If it missed the notice in the newspapers it could still claim against the estate. He has a very valid complaint. I put it to the Minister that the Inland Revenue seem able to cope and notice things in the newspapers. It is well known that the tax collectors read the gossip columns and "Londoner's Diary" to see who is marrying who and who is selling what at Christie's. They send people there and and to every conceivable organisation dressed as ordinary citizens. They get up to all sorts of tricks. They even——

Mr. Graham Page: I hope that my hon. Friend is not suggesting that the Commission add to its staff of 2,000 a few Blakes.

Mr. Cooke: If the Amendment in the name of my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) is accepted there will be a limit on the number.
The point is, the Inland Revenue officials manage to do a substantial amount of sleuthing and reading of the newspapers. They even sent someone to pay half a crown to see my stately home. He got the impression that I was making money out of the operation. How wrong he was.

Mr. Onslow: I understood the right hon. Gentleman to be congratulating himself on his prudence and foresight in collecting into this one Schedule a number of provisions and stipulations in the Bill which it is clearly sensible to see collected in one Schedule. Before he pats himself too heavily on the back, may I ask him to explain why it is only at this late stage in our consideration of the Bill that this blindingly obvious need has dawned on him?

Mr. Willey: The hon. Gentleman was a member of the Standing Committee. This did not occur to him then. If it is so blindingly obvious, it should have been blindingly obvious to him then, and had it been so he was under a duty to call our attention to it. From a practitioner's point of view it is better to collect them together in the Schedule. I was not patting myself on the back. I was stating something which was equally obvious.

Mr. Onslow: rose—

Mr. Willey: I shall not give way. This is the Report stage.

Mr. Robert Cooke: Surely the right hon. Gentleman is not seeking to hide behind a procedural device to prevent my hon. Friend the Member for Woking (Mr. Onslow) from getting a straight answer to his question?

Mr. Willey: The hon. Member for Woking (Mr. Onslow) knows that he was being frivolous and was not adding anything to our discussion.

Mr. Onslow: Having accused me of being frivolous, will the right hon. Gentleman now give way?

Mr. Willey: The accusation was not necessary. It was so obvious.
The matters to which the hon. Gentleman called attention are in the Bill. They are not amended by the Schedule. The hon. Gentleman called attention to paragraph 9(4). This relates to things done by the personal representative and not to things which occurred before death, and it would be wrong, if a charitable act or event occurred during the administration of the estate and the personal representative had no personal liability, for the Commission to be able to protect itself.

Question put and agreed to.

Schedule read a Second time, and added to the Bill.

New Schedule.—(ASSESSMENT OF LEVY ON ACQUISITION BY COMMISSION.)

1. For the purpose of assessing levy in Case A in respect of a disposition of an interest in land to the Commission (in this Schedule referred to as 'the disposition') the provisions of sections 43 to 55 of this Act shall have effect subject to the following provisions of this Schedule.

2. For the purposes of the application of those sections and of the following provisions of this Schedule in relation to any time on or after—

(a) the date on which an agreement for making the disposition has been made, or
(b) the date which (whether by virtue of the execution of a general vesting declaration or otherwise) is the date of service of a notice to treat for the acquisition of the relevant interest by the Commission,

but before the disposition is made, it shall be assumed that the disposition will be made on the date on which subsequently it is in fact made.

3. In relation to any such time as is mentioned in paragraph 2 of this Schedule sections 43 and 44 of this Act shall have effect as if, for the words 'has occurred', in subsections (1) and (2)(a) of section 43 and in subsection (1) of section 44, there were substituted the words 'is about to occur'.

4. Section 45 of this Act shall have effect as if subsection (1)(c) of that section were omitted.

5.—(1) If, in any proceedings relating to the compensation payable by the Commission for the compulsory acquisition of the relevant interest, the Lands Tribunal determines the amount of that compensation, and—

(a) before that decision of the Tribunal is made a notice of assessment of levy has (whether before, on or after the date of the disposition) been served in respect of the disposition and a counter-notice objecting to it has been served under section 46 of this Act, and the objection has been referred to the Tribunal but that reference has not been finally determined, and
(b) the principal amount of levy specified in the notice of assessment of levy was calculated on the assumption that the amount of the compensation would be less than the amount determined by the Tribunal,

the increase in the amount of the compensation shall, for the purposes of section 47(2) of this Act, be included among the matters which the Tribunal is required to consider on that reference.

(2) Where the preceding sub-paragraph applies, then, notwithstanding anything in section 47(3) of this Act, the Lands Tribunal may vary the notice of assessment of levy by increasing the principal amount of levy specified in it, in so far as the Tribunal determines that it is appropriate to do so in consequence of the decision of the Tribunal as to the amount of the compensation.

6. If in any proceedings relating to the compensation payable by the Commission for the compulsory acquisition of the relevant interest, the Lands Tribunal determines the amount of that compensation, and—

(a) that decision of the Tribunal is made after a notice of assessment of levy has (whether before, on or after the date of the disposition) been served in respect of the disposition and has resulted in an operative assessment of levy, and
(b) the principal amount of levy specified in the notice of assessment of levy was calculated on the assumption that the amount of the compensation would be less than the amount determined by the Tribunal,

section 55 of this Act shall apply as if such a decision of the Tribunal were included among the circumstances to which that section applies.

7. Sections 50 to 53 of this Act shall not have effect in relation to a notice of assessment of levy served in respect of the disposition, whether it is served before, on or after the date of the disposition.

Brought, up, and read the First time.

Mr. Allason: I beg to move, That the Schedule be read a Second time.
Amendment No. 68 barred the Lands Tribunal from increasing the levy on appeal. We were very anxious to have that provision, but there is a reasonable exception to this, namely, where there is an appeal to the lands tribunal not only in respect of compensation for compulsory purchase, but against the levy itself. These two appeals will interact, and it would not be right to bar the Lands Tribunal from increasing the amount of levy if it increased the amount of compensation. This Schedule gives effect to that, and it is introduced in the Bill by the Amendment that we have made to Clause 70.
In addition, there are certain other matters contained in the Schedule, arising from the fact that the Commission acquires the land by compulsory purchase. Therefore, because it acquires the land it knows its own intentions in advance and works out the levy in advance. So the reference to events which have occurred, as in Clauses 43 and 44, gets the tense entirely wrong. The Schedule therefore contains provisions that certain Clauses shall be read as though they contained different words, in the circumstances to which the Schedule relates.
This will be an enormous comfort to laymen such as myself, who do not go right through all the Schedules before turning to the Part of the Bill where they expect to see a reference to the legal position in which they find themselves. But I fear that this is one of the penalties that we have to pay when we read through this fantastic Bill.

Mr. Willey: We are very happy to accept the new Schedule.

Question put and agreed to.

Schedule read a Second time, and added to the Bill.

Schedule 1.—(CONSTITUTION AND PROCEEDINGS OF COMMISSION.)

12.30 a.m.

Mr. Graham Page: I beg to move Amendment No. 115, in page 89, line 35, to leave out from 'as' to the end of line 36, and to insert:
'the Ministers may, after consultation with the Treasury, specify by regulations'.
The Schedule relates to the constitution and proceedings of the Land Commission and paragraph 5(1) provides that—
The Commission, with the approval of the Ministers, may appoint a secretary of the Commission, and such other officers and servants


as the Commission may, after consultation with the Ministers and with the consent of the Treasury, determine.
So the staff can be fixed by the Commission itself—true with the consent of the Treasury, but only after consultation with the Ministers.
We have been given assurances throughout the passage of the Bill—right from the Second Reading debate—that the staff of the Commission would be 2,000. My estimate of the work which the Commission will have to face by reason of some of the unnecessary complications in the Bill is such that the figure may be very much higher. I would not wish to leave the matter merely to the Commission to decide, even though it can do so only with the consent of the Treasury. With a new body of this sort the question of the number of staff should be regarded as something more than an executive act; it should be known to the House.
Under the Amendment
'the Ministers may, after consultation with the Treasury, specify by regulations'
The operative word is "regulations", because those of us who are now familiar with the Bill know that regulations under it have to be made by way of a Statutory Instrument, which must be brought before the House and which is subject to annulment by Resolution, in this case, of the House of Commons alone.
We propose that the House should be told the size of the staff of this body and have a chance of discussing and debating it in the House, if a Member sees fit to put down a Prayer against the Statutory Instrument containing these regulations. We want to see how this new body will work and to ensure that it is not increasing indefinitely in size; that it is running its business economically and has no more than adequate staff.

Mr. Onslow: The Minister reminded me—as if I were ever likely to forget—that I was a member of the Standing Committee which considered the Bill. Had I realised that he was relying so heavily on my advice and assistance in Committee, I should have been glad to give him it. This revelation came late, and I am sorry that he did not make it clear sooner to the whole House, because I do not think that many of my hon. Friends were aware that the Minister was genuinely seeking assistance to make the

Bill comprehensible. He has refused that which has been offered by my hon. Friends, who are much more qualified than I.
I have been following the proceedings as best I can, but I must confess that the general impression which they have made on me is as if I had been an unwilling spectator at a performance of "Mother Goose" on ice by the Mongolian State Opera—the level of incomprehensibility in the last few days has been such that I can put it no higher. However, we have been afforded occasional glimpses of the comprehensible. This Amendment and the accompanying explanation so ably given by my hon. Friend the Member for Crosby (Mr. Graham Page) has been one such glimpse.
It is important that stringent control should be written into the Bill over the size of the bureaucracy which the Commission will be allowed to amass. This is not just because the Minister has given an assurance that he will see it limited to 2,000—a considerable number, but evidently essential in his terms. It is not just because the Chancellor of the Exchequer has issued exhortations that the size of the bureaucracy should be limited. Unfortunately, the Chancellor's exhortations so often have precisely the opposite effect, and the size of the bureaucracy is increasing. It is because—the Minister must agree with this—Ministerial estimates and letters in the Library of the House are no substitute for hard legislation.
I hope, therefore, that the Minister will realise that this is a serious point and that he will win back at least some of the sympathy which he has lost in the country for his stubborn refusal to deploy the arguments in favour of this rush of Amendments to his Bill if he could give at least some indication to the unfortunate taxpayers that he is prepared to set a limit on the number of staff which the Commission may arrogate to itself.

Mr. Frank Hooley: The arguments of hon. Gentlemen opposite show a curious lack of grasp of the tendencies in administration and a total failure to realise that there are technological advances all the time, as a result of which it is absurd to specify that a certain number of people are required to do a certain job, whether


in administration or in almost any other sphere. Machinery, equipment and devices of all kinds are coming into use in administration almost every day and certainly every year.
To ignore this trend and pretend that one can simply lay down a number of administrators as being required for any job simply shows a total lack of understanding of the kind of level reached in administration today. I hope that this kind of attitude will disappear as soon as possible.

Mr. Skeffington: This is a remarkable Amendment, even for this hour of the morning. If it were accepted we would be doing something absolutely without precedent. No other body in similar circumstances—indeed, in any circumstances I can think of—would have such a limitation and qualification placed on it. Coming from hon. Gentlemen who say they are anxious to see the minimum amount of bureaucracy, this is a curious way of attempting to achieve that aim. The Commission will be staffed by public servants, civil servants, and all will be subject to the normal Treasury control over staff matters.
It would be quite wrong for Ministers to attempt to regulate the staff in detail in the way proposed and I trust that the House will reject the Amendment with contempt.

Mr. Allason: We welcome the intervention of the hon. Member for Sheffield, Heeley (Mr. Hooley). Had he been present earlier he might have realised that we are thoroughly up to date in considering how matters should be run. Indeed, a computer will soon be in action in Newcastle-upon-Tyne, and this will be of enormous value.
The Parliamentary Secretary said there was no precedent for our proposal. I draw his attention to the Services. How many admirals does he believe there would be if the Navy was given permission to engage all the men it could possibly need to do the jobs that need doing? That is exactly comparable. If there is not Ministerial control, staff numbers go leaping ahead. A certain event took place in 1951. A Tory Government were returned and they sent out a directive stating that the branches of

Government in Whitehall should be reduced in size by 10 per cent. That was carried out, irrespective of whether or not it was feasible. In my case, I applied for an increase in staff for my branch, so that I did not suffer the 10 per cent. loss, but somebody else had to have the staff of his branch reduced to make up the difference.
We do not believe that a staff of 2,000—the figure mentioned by the Minister—will be anything like sufficient, even with the assistance of district valuers. We must consider what they will be doing. They will be dealing with up to 2 million notifications of chargeable acts and events a year. Even if with the most superb technological advances, an enormous staff will be needed as white heat is generated when the forms arrive for processing. Even with a computer, it is difficult to imagine how two men will be able to man the machine. Indeed, a team of technicians will be on hand to repair the computer when it burns out.
In addition to technological advances which may be of assistance, men will be tramping round serving notices on people and sticking notices on conspicuous objects on property. They will be inspecting sites—causing damage in the process—and prospecting for minerals. Others will be selecting land which the Commission will take. Some will be preparing compulsory purchase orders and others will be dealing with general vesting declarations. Some will be administering the land which the Commission intends to hold for possibly considerable periods for future development, perhaps for housing estates in areas where the Commission considers that local authorities may in future want to make clearance orders.
12.45 a.m.
This will include people who are previous owner-occupiers and those who were previously rent-protected tenants. They will all become tenants of the Crown, and lose the protection of the Rent Act, and their freehold. All of this will have to be managed and looked after, the rent collectors will have to be appointed, and so on. Then there are those who will be engaged in administering the crown-hold. They will be selecting those favoured concessionary crownhold tenants who are to be given special privileges.
There will also be those engaged in selecting the builders who are to receive


concessionary terms for obtaining land for house-building at specially reduced prices. There will be many more people involved, I have only picked out some of those whom we have seen in the course of the passage of the Bill. How all of this will be done with a staff within 2,000, I do not know. I should have thought that 2,000 people would be engaged simply in clearing the wastepaper baskets of this Commission.

Mr. W. O. J. Robinson: Before the hon. Gentleman sits down, would he confirm that I correctly understand the Amendment? Is its purpose to remove from the Commission any decision as to numbers of staff which it might require? According to the Amendment, the only people who will come into the picture will be the appropriate Minister and the Treasury.

Mr. Allason: This is precisely the intention, and I thought that we had indicated that very clearly there should be Ministerial responsibility for this. I gave the example of the Forces. The hon. Gentleman surely would not think that the Forces could be given carte blanche to engage the number of people they thought necessary. There will, of course, be advice from the Commission, as to what it would like, but the Minister would be very wise not to accept that.

Mr. W. O. J. Robinson: With respect——

Mr. Speaker: Order. The hon. Gentleman has no right to speak indefinitely. We are on the Report stage of the Bill.

Mr. Robert Cooke: In reinforcing what my hon. Friend has said in moving this Amendment, I would like to make sure that the right hon. Gentleman realises that the increase in numbers in the Civil Service up to March of this year—and these figures are from the OFFICIAL REPORT—was 15,000, and that between last March and 1st July there was a very considerable increase——

Mr. Speaker: Order. We are not discussing the rise or otherwise of the Civil Service. We are discussing the Amendment, which the hon. Gentleman might look at.

Mr. Cooke: I left the Chamber to get these figures, Sir. I did not intend to

pursue the matter at any length, but I wanted to say that we now have 19,500 additional civil servants since October, 1964. In view of this tremendous rise, and the swiftly-rising curve, I hope that the Minister will give proper attention to what my hon. Friend has said.

Amendment negatived.

Mr. Allason: I beg to move Amendment No. 116, in page 90, line 22, to leave out 'is the subject of' and to insert:
'may be materially affected by'.
This Amendment refers to the position of members of the Commission with property interests who are dealing with cases in which they have an interest, even though that interest is remote. It would require disclosure of a direct or indirect interest in a transaction, and would debar him from discussing that transaction or voting on it.
Quite clearly, where a member's interest in a piece of land is directly affected by a transaction there is no question of his taking part in the transaction. But there is the borderline case where he has an indirect interest in the land under discussion or, alternatively, has a direct interest in land which is indirectly affected. It seems desirable to cover the case where the member has an interest, either direct or indirect in land which is affected, even though it is not the land concerned in the transaction.
A piece of land adjacent to the land being discussed may well be affected favourably or unfavourably, and it is against human nature for the member of the Commission not to have some considerable feeling on the subject. Quite clearly, in such a case he would not wish to take part in discussions if he is connected in that way. We want this to be demonstrated. To a layman it seems to be desirable that a member affected by a transaction should not be able to influence the decision in any sort of way.
In Committee, the Minister accepted the logic of this point, but said that there were great difficulties facing members of the professions. They might be partners in a large firm of estate agents with property interests all over the country, and it would be very difficult for them to comply with these terms. I appreciate that there is a real problem involved


here, but justice should appear to be done as well as done. It should be beyond question that a member of the Commission should not take part in a transaction, if his interest may be affected, even though only in an indirect way. That is the overall purpose of the Amendment, and everyone will feel very much happier if the Amendment is accepted.

Mr. Skeffington: There are three very good reasons why my right hon. Friend cannot advise the House to accept the Amendment. First, it is impracticable. Secondly, it would impose rather humiliating conditions upon professional people. Thirdly, it would have the effect of derogating very considerably from the condition which is already in the subparagraph.
I will deal with those reasons in order. First, it would be impossible to know when land would be materially affected as a result of a transaction by the Commission. This would depend upon the type of land the Commission bought. It would depend on whether it was buying it long in advance for a particular purpose, so that the person who might be connected would never know when it was his duty to make a declaration. The land might be bought many years in advance of its having any significance. Therefore, it would be impracticable to operate the proposal.
Secondly, as we said in Committee, the personnel of the Commission will be professional and honourable people whom we can expect to act in an honourable way. There is a provision in relation to any land subject to a conveyance, and this would affect them. To impose any further conditions might severely limit the number of people who would be prepared to serve the Commission, because they might not wish to serve under the kind of condition the Amendment seeks to impose upon them. Professional bodies which have been consulted think that we may have gone rather too far in the conditions we have already imposed. So, on this ground, I could not advise the House to accept the Amendment.
There is a third and more serious reason. If the Amendment were made, apparently it would be possible for a person to have an interest in land which

was subject to conveyance by the Commission but which would not be materially affected and consequently it would considerably derogate from the first part of the sub-paragraph.
For all these reasons, this is an impossible Amendment.

Amendment negatived.

Amendment made: In page 91, line 28, at end insert "direction".—[Mr. Willey.]

Mr. Graham Page: I beg to move Amendment No. 118, in page 91, line 30, to leave out sub-paragraph (2).
The sub-paragraph provides that
Without prejudice to the preceding subparagraph, the validity of a compulsory purchase order made by the Commission shall not be affected by anything contained in a direction given under section 1(3) of this Act or by reason that any such direction has not been complied with.
The direction under Clause 1(3) is a direction by the Minister to the Commission to do something in the course of carrying out its functions as the Land Commission. It could be argued that this sub-paragraph provides that anything which the Commission does in disobeying the Minister, anything which it does not in accordance with the Minister's directions, whether they be general or specific directions, is apparently perfectly sound.
I cannot see the purpose of the subparagraph. I know the provision which protects a purchaser from a local authority or a statutory undertaker, or which might protect the purchaser from the Commission when the Commission is acting not in accordance with directions, but that comes in the previous sub-paragraph. I fail to see the purpose of paragraph 14(2), and that is why I seek to remove it from the Bill.

1.0 a.m.

Mr. Skeffington: The hon. Gentleman is quite right. We did have a discussion about it then, and I thought that my right hon. Friend had explained that the provision is necessary for the benefit of the citizen, as it is in other cases. It is modelled on Section 29(1) of the Town and Country Planning Act, 1959. It would be wrong to put the citizen at risk because his title to land might not be good because the Commission had failed to comply with a particular direction by the Minister. The Minister will


have other ways of ensuring that the Commission does so comply, but the fact that the citizen could suffer as a result of a failure would, we think, be quite intolerable. I hope that with this explanation the hon. Member will not press the Amendment.

Mr. Graham Page: I am not certain to whom the hon. Gentleman refers when he speaks of the citizen. This concerns a compulsory purchase order by the Commission, and the citizen in question is the vendor. How is he concerned with the power of the Commission?

Mr. Skeffington: There may be a case of a purchase from the Commission of land which is the subject of an order.

Amendment negatived.

Schedule 3.—(SUPPLEMENTARY PROVISIONS AS TO GENERAL VESTING DECLARATIONS.)

Mr. Allason: I beg to move Amendment No. 121, in page 93, line 21, at the beginning to insert:
'Except as provided by paragraph 12 of this Schedule'.
It may be for the convenience of the House if we consider with it Amendment No. 122, in page 93, line 27, after 'severed', insert:
'and is so served within the time allowed in accordance with paragraph 4(2) of this Schedule'.
and Amendment No. 126, in page 94, line 48, at end insert:
12.—(1) Where in accordance with paragraph 4(1) of this Schedule a person is entitled to serve a notice of objection to severance, and it is proved—

(a) that he never received the notice required by section 9(3) of this Act to be served on him, or received that notice less than twenty-eight days before, or on or after, the date on which the period specified in the general vesting declaration expired, and
(b) that a notice of objection to severance served by him was served not more than twenty-eight days after the date on which he first had knowledge of the execution of the general vesting declaration,

that notice shall have effect notwithstanding that it is served after the time allowed in accordance with paragraph 4(2) of this Schedule has expired.
(2) Where, in the circumstances specified in the preceding sub-paragraph, a person serves a notice of objection to severance after the end of the period specified in the general vesting declaration,—


(a) paragraphs 5 and 8 of this Schedule shall not have effect in relation to that notice;
(b) paragraph 6 of this Schedule shall have effect in relation to that notice as if subparagraph (a) of that paragraph were omitted;
(c) paragraph 7 of this Schedule shall have effect in relation to that notice with the substitution, for the words 'sub-paragraph (a)', of the words 'sub-paragraph (b)'; and
(d) paragraph 10 of this Schedule shall not have effect in relation to that notice, but without prejudice to the making by the Tribunal of any such determination as is mentioned in that paragraph.

Mr. Speaker: If the House has no objection, so be it.

Mr. Allason: There are supplementary provisions in the Schedule as to general vesting declarations, and it is here that we seek to make Amendments. Where there is a compulsory purchase order on part of a person's property he is entitled to appeal against severance; in the case of a house, building or factory that the loss of the part causes material damage; and in the case of a park or garden that it seriously affects the amenity or convenience of the property. If this is agreed, the compulsory purchase order must be extended to the whole.
Such objection to severance must be served within 28 days after the service of the notice of the general vesting order on him. But if the person on whom the notice is served does not receive it he is in some trouble, because 28 days after service the general vesting declaration takes effect and he has lost the property. He may still want to appeal, and he should have some rights. Amendments Nos. 121 and 122 are paving Amendments, and Amendment No. 126, makes provision for his either never having received the notice or having received it too late, not necessarily after the 28 days had expired.
There are normally four courses open to the Commission, but, once the land has been vested, two of those courses are not applicable. The courses normally open to the Commission on receiving objection are withdrawal of notice to treat, acceptance of a requirement to purchase the whole, reference to the Lands Tribunal, or no action for three months, in which case the Commission is deemed to have withdrawn the notice to treat.
The first and last of these courses are not applicable in the present case and we are left with either the Commission accepting the requirement to purchase as a whole or a decision to refer to the Lands Tribunal. The effect of Amendment No. 126 is to confine the alternatives to those two.
Sub-paragraph (2) of Amendment No. 126 makes detailed amendments to the procedure in this case. Paragraph 5 of the Schedule does not apply because the land may already have been taken, and paragraph 8 does not apply because course 1, withdrawal of notice to treat, and course 4, taking no action for three months, are not applicable. Paragraph 6(a) of the Schedule does not apply for the same reason as paragraph 8 does not apply. Paragraph 7 requires a consequential amendment, and paragraph 10 must have changes to allow the Lands Tribunal to take a decision, but the reference in paragraph 10 to the Lands Tribunal cancelling paragraph 5 is entirely applicable.
With the changes made by Amendment 126 in that way, we allow someone to serve notice of objection to severance on the Commission, and it will then be possible for that notice to go on reference to the Lands Tribunal even though the objection was received by the Commission out of time, on condition that it is a bona fide case in which, although the Commission served notice correctly, it was not received by the person concerned.

Mr. Willey: The Government are very happy to accept this Amendment and the related Amendments.

Amendment agreed to.

Further Amendment made: In page 93, line 27, after 'severed' insert:
'and is so served within the time allowed in accordance with paragraph 4(2) of this Schedule'—[Mr. Allason.]

Mr. Allason: I beg to move Amendment No. 124, in page 94, line 32, to leave out from 'Tribunal' to the second 'the' in line 34 and to insert:
'does not make a determination in accordance with'.
I think that it would be convenient to discuss at the same time Amendment No. 125, in page 94, line 36, to leave out from

'whole' to the end of the line and to insert:
'of it or a part of it which includes the part comprised in the general vesting declaration) which the Commission ought to be required to take'.

Mr. Speaker: If there is no objection, so be it.

Mr. Allason: Paragraph 11 of the Schedule allows the Lands Tribunal to determine where additional land ought to be taken in order to avoid detriment which the owner has complained will occur. The two Amendments alter the existing wording from "land necessary to avoid damage" to "land which ought to be taken". This is the subtle distinction. It is very limiting to speak of land strictly necessary to be taken. If the reference is to land which ought to be taken, the Lands Tribunal is given discretion to instruct that a somewhat wider area of land should, for convenience, be taken.
The sort of example might be that where there is land to be taken in an area it would leave a small portion on the far side which would be totally impracticable and unsatisfactory for the owner and it would be better for the Lands Tribunal to order that the whole should go rather than that what is strictly necessary should go. I think that this, again, is a helpful Amendment.

Mr. Willey: Again, I am happy to accept these Amendments.

Amendment agreed to.

Further Amendments made: In page 94, line 36, leave out from 'whole' to end of line and insert:
'of it or a part of it which includes the part comprised in the general vesting declaration) which the Commission ought to be required to take'.—[Mr. Allason.]

In page 94, line 48, at end insert:
12.—(1) Where in accordance with paragraph 4(1) of this Schedule a person is entitled to serve a notice of objection to severance, and it is proved—

(a) that he never received the notice required by section 9(3) of this Act to be served on him, or received that notice less than twenty-eight days before, or on or after, the date on which the period specified in the general vesting declaration expired, and
(b) that a notice of objection to severance served by him was served not more than twenty-eight days after the date on which he first had knowledge of the execution of the general vesting declaration,



that notice shall have effect notwithstanding that it is served after the time allowed in accordance with paragraph 4(2) of this Schedule has expired.
(2) Where, in the circumstances specified in the preceding sub-paragraph, a person serves a notice of objection to severance after the end of the period specified in the general vesting declaration,—

(a) paragraphs 5 and 8 of this Schedule shall not have effect in relation to that notice;
(b) paragraph 6 of this Schedule shall have effect in relation to that notice as if subparagraph (a) of that paragraph were omitted;
(c) paragraph 7 of this Schedule shall have effect in relation to that notice with the substitution, for the words 'sub-paragraph (a)' of the words 'sub-paragraph (b)'; and
(d) paragraph 10 of this Schedule shall not have effect in relation to that notice, but without prejudice to the making by the Tribunal of any such determination as is mentioned in that paragraph.—[Mr. Allason.]

In page 96, line 39, leave out 'This paragraph shall' and insert' Sub-paragraph (1) of this paragraph shall, in relation to England and Wales'.—[Mr. Willey.]

In page 96, line 40, leave out 'and shall not apply to Scotland'.—[Dr. Dickson Mabon.]

Amendment proposed: In page 96, line 40, at end insert:
(3) As respects Scotland, in reckoning the period of six years referred to in sub-paragraph (1) of this paragraph, no account shall be taken of any period during which the per son claiming compensation or the person from whom he derives title was in minority or less age or was under legal disability.—[Dr. Dickson Mabon.]

Mr. Graham Page: I am happy to let things rip along like this as long as the Amendments really are drafting Amendments. But when we come to one that deals with the six years referred to in sub-paragraph (1) and says that
no account shall be taken of any period during which the person claiming compensation or the person from whom he derives title was in a minority or less age or was under legal disability.
I do need a little further explanation of it. This is not just a drafting Amendment.

Dr. Dickson Mabon: I hope that the hon. Gentleman does not feel offended by the fact that I did not rise. It really is, strangely enough, a drafting error. We felt it proper to put down the provision

now proposed which corresponds to the Scottish provision contained in paragraph 6(2) of Schedule 6 to the Town and Country Planning (Scotland) Act 1945. Paragraph 6(1) to that Schedule is in similar terms to paragraph 18(1) of this Schedule. We thought originally that since the Limitation Act 1939 does not apply to Scotland, a statutory limitation was inappropriate to Scotland, but we have reconsidered it.
I would pledge that it is a drafting error and not an error of policy. I hope that the hon. Gentleman does not feel we have been unfair in not speaking to it earlier.

Amendment agreed to.

Schedule 4.—GENERAL PROVISIONS FOR ASCERTAINING FACTORS RELEVANT TO ASSESSMENT OF LEVY.)

Amendment made: In page 97, leave out line 5 and insert:
'Except in so far as the relevant Schedules otherwise provide'.—[Mr. Willey.]

1.15 a.m.

Mr. Willey: I beg to move Amendment No. 131, in page 98, line 24, at the end to insert:
9. In calculating, for the purposes of paragraphs 7 and 8 of this Schedule, the capital value at any date of a right to receive rent payable in respect of a tenancy, it shall be assumed that the tenant under that tenancy—

(a) will always pay that rent when it falls due and will perform his other obligations under the tenancy, and
(b) will exercise any option to renew that tenancy, and will not exercise any option to terminate it, then or thereafter available to him.

I think that it would meet the convenience of the House, Mr. Speaker, if we took Amendment No. 133, in line 28, in discussion at the same time.

Mr. Speaker: If the Opposition have no objection, certainly.

Mr. Willey: We are here dealing with capitalisation of rents in Case B. By reason of these Amendments we are importing assumptions for grounds of certainty. The assumptions are that the tenant will always pay his rent and perform the other obligations imposed on him and, secondly, that the tenant will exercise any option to renew the tenancy and will not exercise any right which he may have to break the tenancy before the end of its full term.

Mr. Allason: I regret, Mr. Speaker, that we should keep you out of bed at this hour of the night to discuss a point which should have been dealt with in Committee. It seems extraordinary that 13 months after first publication of the Government's intentions, they have suddenly come up with this Amendment. We should have had an opportunity of discussing it in Committee, possibly at length.
We need to remember as background to the Amendment that levy is to be paid on a chargeable act or event, in this case the signing of a lease, and that the levy is assessed and is then payable in advance of receiving the valuable consideration, which is the receipt of rent.
I recognise that there must be a basis of assumption as to the amount of rent which will be paid in the future, but the assumption which is made here betrays a complete lack of knowledge of the hard facts of business life. We all know that Ministers lead very sheltered lives, and it is always alleged the civil servants lead sheltered lives, but it would be interesting to know what consultations have taken place with outside bodies on this matter.
In the event, tenants go bankrupt; tenants flit. Tenants leave, and it is then found impossible or not worth while to pursue them for sums in dilapidations, which consequently are not recoverable. Tenants are not all angels, any more than are all landlords. This is recognised by the Government by a tax allowance of one-twenty-sixth on rent-restricted dwellings to allow for such contingencies if the owner agrees to pay tax on the annual sum due as opposed to what he actually collects.
It is probably not possible to find a better basis of assumption than the assumption which the Government are writing in at this late stage. At the same time, I would like an assurance that if the rent does not subsequently materialise, there will be a levy credit which will find its way back to the man who has paid in full on these very assumptions which the Minister is writing into the Bill.

Mr. Willey: The anxieties which the hon. Gentleman has are met under Schedule 7, paragraph 10. He asked me why we should import this assumption,

and the answer is that it is something fairly well known in valuation.

Amendment agreed to.

Further Amendments made: In page 98, to leave out line 26 and to insert:
Except in so far as the relevant Schedules otherwise provide".

In line 28, leave out from beginning to "be" and insert:
of assessing levy in respect of the disposition".—[Mr. Willey.]

Mr. Skeffington: I beg to move Amendment No. 134, in page 102, line 11, to leave out "paragraph 25" and to insert "paragraphs 25 and 26".
It might be for the convenience of the House if we took, with this Amendment, Amendments Nos. 135, 136 and 137.

Mr. Speaker: Unless there is any objection, so be it.

Mr. Skeffington: These Amendments are more than drafting. They are really a tidying-up operation.
The first three Amendments are tied to the fourth, the effect of which is to insert a new paragraph 26 into Schedule 4; their combined effect is to bring paragraphs 23 and 24 into line with subsection (4) of Clause 32. That subsection provides that a tenancy of part, but not the whole, of the relevant land which is subordinate to one of the assessable interests by virtue of which a person is the developing owner, is not an assessable interest for the purpose of assessing levy.
The reason for that is that the developer will be obtaining possession from the tenant of the part in the process of carrying out his project so that liability for any Case C levy in respect of the tenancy should be his and not that of the tenant whose liability, if any, will be under Case A on notification of the assignment or surrender of the tenancy.

Amendment agreed to.

Further Amendments made: In page 102, line 21, leave out 'paragraph 25' and insert: 'paragraphs 25 and 26'.

In line 42, leave out 'paragraph 25' and insert: 'paragraphs 25 and 26'.

In page 103, line 7, at end insert:
26. Where the relevant interest is in reversion immediately expectant upon the termination of a tenancy which (by virtue of


section 32(4) of this Act) is not an assessable interest, that tenancy shall be disregarded for the purposes of paragraphs 22 to 24 of this Schedule.

In line 9, leave out from beginning to 'for' in line 10 and insert:
'Except in so far as the relevant Schedules otherwise provide'.—[Mr. Willey.]

Mr. Willey: I beg to move Amendment No. 139, in page 103, line 24, at the end to insert:
(3) Where the nature of the relevant project is such as is described in paragraph 16(2) of this Schedule, the value referred to in subparagraph (1) of this paragraph—

(a) where the relevant interest is the fee simple, shall be calculated as if it were a tenancy expiring at the end of the period mentioned in the said paragraph 16(2) and
(b) where the relevant interest is a tenancy for a term of years extending beyond the end of that period, shall be calculated as if it were for a term expiring at the end of that period.

I think that it would be for the convenience of the House to take with this Amendment, Amendments Nos. 147 and 171 at the same time.

Mr. Speaker: If there is no objection, so be it.

Mr. Willey: Again, these are tidying-up Amendments. Paragraphs 16(2) and 25 of Schedule 4 deal with market value in Case C in the special cases where the development is of a "wasting nature." These Amendments are making corresponding provisions relating to base value.

Mr. Graham Page: This is a rather peculiar Amendment. We are introducing it into the part of the Schedule which deals with market value. I cannot understand from the Amendment whether it increases market value or reduces it. If it increases it, it increases the levy. That is why I am rather curious about it.
I do not know whether the Minister can give me an assurance that this is some common form of valuation, about which I have not heard before, treating the fee simple as a tenancy. It seems to be a very peculiar way of valuing and trying to ascertain market value. If the Minister would say one or two words of explanation, I would be satisfied.

Mr. Willey: I am obliged to the hon. Member for raising this point. There is nothing untoward about this. These are corresponding provisions being made in view of other provisions in the Schedule.

Amendment agreed to

Further Amendment made: In page 105, leave out line 2 and insert:
'Except in so far as the relevant Schedules otherwise provide'.—[Mr. Willey.]

Mr. Skeffington: I beg to move Amendment No. 141, in page 107, line 36, at the end to insert:
(e) to any expenditure which has been or is to be met directly or indirectly by a government department or a local authority, or.
Paragraph 43 of Schedule 4 lists types of expenditure which are ineligible for allowance as "expenditure on improvements and ancillary rights". The effect of the Amendment is to add to the list of ineligible items expenditure which is paid or reimbursed by central or local government. There is no reason why there should be an allowance for improvements which neither the owner nor his predecessor paid for. There is a similar provision for Capital Gains Tax purposes in Schedule 6 of the Finance Act, 1965, so this has a respectable parentage.

Mr. Graham Page: I do not know about respectable parentage. It is most disreputable if it comes from capital gains. I wonder whether this is the right principle. On the face of it, it seems right. If a man has been given a sum of money to make improvements then he should not be allowed to take that into account. When one thinks of the context in which this is being introduced one sees that it is added to the current use value to get the face value, if he is allowed this expenditure. If he is disallowed it he is still, when he sells the property, getting the value of that money in the market value. He is given this grant and he is getting market value, which means that it is added to the figure at the top end. Then it is taken off again to reach face value.
This is surely increasing the margin on which the levy is payable. I do not believe that this is a right principle with expenditure of this sort. If it is not to be added to the current use value in order to ascertain the face value, then it should be deducted from the market value at the top end of the scale because he is getting the benefit of it when he sells, therefore bringing it into his market value. This is a wrong principle and the only one to gain is the Land Commission.

Amendment agreed to.

Mr. Willey: I beg to move Amendment No. 142, in page 107, line 37, after 'incurred', to insert 'after 21st December 1965'.
This Amendment will appeal to the hon. Member for Crosby (Mr. Graham Page). We are making it in response to an Amendment which the Opposition withdrew in Committee on an undertaking given by the Parliamentary Secretary that he would look at the matter again.

1.30 a.m.

Mr. Graham Page: Yes, it does appeal to me but I think that the Minister has got the wrong date. On a previous Amendment he allowed me 29th December instead of 21st December. Will the right hon. Gentleman take back the Amendment and look at this date again? Having put 29th December in one part of the Bill, it will be very confusing to have 21st December in another part of it. It is true that the old Bill, the first of these Bills, was printed, or purported to be printed, on 21st December.
The reason for fixing that date was that it was the date on which people knew what was in the Bill when it was made public. But that was not the date when it was made public, as I tried to show on a previous Amendment. The Minister accepted that it became public on 29th December. I am sorry if I am getting the Minister into difficulties because of his kindness and generosity to me on a previous occasion, but it will be rather confusing to have two different dates in the Bill.
It may be that a different principle applies here, but, on the face of it, it seems that it has been chosen because of the knowledge of the Bill. Anyone who spends money with knowledge of what is in a Bill does not deserve to have any relief or benefit out of it.

Mr. Willey: Mr. Speaker, perhaps you could help us. I am always greatly obliged to the hon. Member for Crosby for the careful scrutiny which he makes of the provisions of a Bill. He could not know that we would accept his Amendment, but we have done so, and if it were possible to put in a manuscript Amendment to meet his wishes I would certainly be willing to do so.

Mr. Speaker: Perhaps the right hon. Gentleman will let me have a manuscript Amendment.

Mr. Willey: Yes, Sir. It is in page 107, line 37, after 'incurred', to insert 'after 29th December 1965', and replaces the Amendment which we were discus sing.

Mr. Speaker: It is obviously the will of both sides of the House that this Amendment should be made.

Amendment agreed to.

Further Amendments made: In page 108, line 46, leave out from 'Schedule' to end of line 50 and insert:
'any reference in Part III of this Act to the amount of any expenditure on improvements or ancillary rights in so far as it has increased the development value of the relevant interest shall be construed as a reference to the amount so ascertained'.

In page 109, line 9, leave out from first 'the' to end of line 13 and insert:
'reference in section 30(4) of this Act to the amount of any expenditure on improvements or ancillary rights in so far as it has increased the development value realised by the disposition shall be construed as a reference to the amount calculated in accordance with the preceding sub-paragraph'.—[Mr. Willey.]

Schedule 5.—(BASE VALUE DERIVED FROM PREVIOUS TRANSACTION.)

Mr. Skeffington: I beg to move Amendment No. 145, in page 109, line 44, at the end to insert:
(3) Any reference in this Part of this Schedule to a previous disposition of the chargeable interest shall be construed as including a reference to any previous disposition which—

(a) comprised the whole or part of the relevant land together with other land, and
(b) would (apart from this sub-paragraph) have been a previous disposition of the chargeable interest if it had been limited to the relevant land.

I think that it would be convenient to discuss with it Amendment No. 172.

Mr. Speaker: Yes, if the House has no objection.

Mr. Skeffington: This is a rather long Amendment, but it is only a drafting one. In case anyone thinks that at this late hour I am trying to speed up the proceedings, perhaps I might explain that this is not so.
Schedule 5 is primarily concerned with base value derived from a consideration


paid for previous disposition, and Schedule 7 contains the provisions which affect more than one of the other Schedules. These Amendments revise the arrangements in the Bill which deal with the situation where it is in the interests of the levy payer to have base value under Schedule 4 which relates to current use value for some parts of the land and base value under Schedule 5 to the other part. There is no new addition. It is merely a rearrangement very much in the interests of the levy-payer.

Amendment agreed to.

Further Amendments made; In page 110, line 41, leave out from second 'to' to 'if in line 42 and insert:
'such other provisions of the relevant Schedules as are applicable to this paragraph'.

In page 111, line 21, at end insert:
(3) For the purpose of determining under the last preceding sub-paragraph what would have been the current use value of the relevant interest if ascertained as at the date of the last relevant disposition, where that disposition constituted a chargeable act or event falling within Case A, the reference in that sub-paragraph to the date of that disposition shall be construed as a reference to the time immediately after that disposition was made.—[Mr. Willey.]

Mr. Graham Page: I beg to move Amendment No. 230, in page 112, line 40, at the end to insert:
12.—(1) Where the conditions specified in sub-paragraph (3) of this paragraph are fulfilled, a disposition to which this paragraph applies shall be taken to have been a relevant disposition of the chargeable interest, notwithstanding that it does not fall within paragraph 3 of this Schedule.
This Amendment adds a new paragraph to the Schedule. I admit that in drafting it I have stolen to a great extent the clothing of the Minister by taking the wording of paragraph 11 of the Schedule, because I seek to grant a certain relief to those who have been placed in difficulty by a sudden change in legislation. This is of considerable importance from the point of view of the size of the transaction with which it deals. I am told that there is certainly more than one transaction—I know of one, and I am told that there are several others—which would suffer severely if the Amendment were not accepted.
Some developers, having appreciated that if they started to develop before the appointed day they would not be caught by a Case C levy, made arrangements for

a development project exceeding £50,000 but not exceeding £100,000. They chose those figures because such a project would be lawful under the Building Control Bill, as it then was. The House will remember that much publicity was given to this. A previous Minister of the Crown threatened that if builders did not observe what was laid down in the Bill at the time, even though the Bill was to die by the death of that Parliament they could expect to be penalised when he reintroduced the Bill.
There was much publicity of this sort, and it was, therefore, quite reasonable to say of developers that even before the Building Control Act, 1966, received the Royal Assent on 9th August, 1966, they knew quite well that they would require a licence for any development exceeding £100,000, and would be unlikely to obtain a licence.
In fact, this figure was mentioned in the Bill. I have it beside me. We were given to understand that the unlawful projects—those which were unlawful without a licence—were those which would exceed £100,000. On the very day that the Bill received the Royal Assent—and this is becoming the practice with legislation from this Government—the figure was reduced by Statutory Instrument No. 987 to £50,000, so that developers who had started to make arrangements for their developments after 25th September, 1965, for a development which did not exceed £100,000 but did exceed £50,000—the latter figure unknown to them at the time as having any importance—found that on and after 9th August, 1966, they could not proceed with that development.
They should undoubtedly be given some relief in this case. In an earlier discussion, the Minister mentioned the case of those who paid in the interim period, and who might well get caught on a double payment of tax—a payment of Capital Gains Tax and levy. He gave those people relief, because it is obvious from the Bill and from the expected provisions of the Finance Act, 1967, that they would suffer from an overlapping of Capital Gains Tax and levy.
The principle is the same here, concerning people who entered into arrangements perfectly innocently, not only without knowing that there would be an


alteration in the law, but being led to believe that the law would be that licences would be required not for projects over £50,000, but for projects over £100,000, this being followed suddenly, out of the blue, on the very day that that Act received the Royal Assent, by an order reducing the figure.
Some of them—I say "some", but can prove one—have made arrangements for projects which they can no longer carry out. In these circumstances, when they eventually start to carry out that project—it will be after the appointed day—they will have to use their purchase price as the base value. In that, of course, they will have paid for development value, so they are using a wrong base, or a base which they would not have used because they would never have purchased at that time because they would have known that they could not have done the development.
It is the same sort of principle as occurs in subsection (11), in which the Minister has given relief, in those circumstances, to builders or developers on or after 1st August, 1966. It is a question of having been led into using the base value under these Schedules in a way which they would never have done if they had known that the law would have been changed against them on 9th August, 1966. This is a case justifying relief, in the same way that the Minister said that there was a case for relief. He introduced it in subsection (11) and I wish to introduce a similar relief in subsection (12) for those people who have been caught.

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

1.45 a.m.

Mr. Willey: The hon. Member for Crosby (Mr. Graham Page) fully deployed his argument for the Amendment, but I cannot accept it. It would be wrong to accept the proposal in respect of prospective developments.

Amendment negatived.

Amendments made: In page 113, line 27, leave out from second 'to' to 'if' in line 28 and insert:
' such other provisions of the relevant Schedules as are applicable to this paragraph'.—[Mr. Willey.]

In page 114, line 9, leave out from first 'to' to 'if and insert:
'such other provisions of the relevant Schedules as are applicable to this paragraph'.—[Mr. Willey.]

Mr. Skeffington: I beg to move Amendment No. 150, in page 115, line 7, to leave out 'granted or'.

Mr. Deputy Speaker: It might be convenient if, with that Amendment, the House were to also discuss the following Amendments: Amendment No. 152, Amendment No. 154, and Amendment No. 167.
When we come to Amendment No. 167 it will be open to the hon. Member for Lewisham, North (Mr. Moyle) to move his Amendment to that Amendment, in line 16, leave out from 'by' to 'in' in line 17 and insert:
'notice (whether given by the landlord or by the tenant) or has been terminated by the landlord otherwise than by notice, whether by reentry, forfeiture or in any other way, and (in any such case) has been so terminated'.

Mr. Skeffington: The first three Amendments are small, technical Amendments to Schedule 5, Part III—related tenancies. The disposition of the related tenancy may have been either the assignment of an existing tenancy or the grant of a new tenancy. Part III of the Schedule contains the operative provisions in the case of assignments of related tenancies. Provisions with the necessary modifications to deal with grants of related tenancies will be made in the "tenancies and reversions" regulations under Schedule 7(10). As Schedule 5 does not include them, these Amendments remove the existing references to dispositions granting a tenancy.
The fourth Amendment involves, effectively, the complete redrafting of Schedule 7(10), which gives power to make regulations containing the necessary exceptions, modifications and additional provisions for dealing with tenancies and reversions.

Amendment agreed to.

Mr. Willey: I beg to move Amendment No. 151, in line 7, to leave out 'in title'.

Mr. Deputy Speaker: I suggest that it would be convenient to discuss, at the


same time, Amendment No. 153, in line 23, at end insert:
(4) In this paragraph "predecessor" means a predecessor in title of the chargeable owner, not being a person from whom that owner or any other predecessor in title of his derived title under a disposition for valuable consideration.

Mr. Willey: That is convenient. The new sub-paragraph (4) inserts a definition of "predecessor" into Schedule 5, paragraph 22 of which delimits the cases to which the "related tenancies" provision of that Schedule apply. The first Amendment is a purely drafting one to pave the way for this definition.
As paragraph 22 is at present drafted, a disposition of a related tenancy qualifies if it was acquired by the chargeable owner and also if it was acquired by a predecessor in title of his. This means that a person can claim an allowance for what any predecessor paid for the tenancy, even though that tenancy had, by merger in the hands of his predecessor, ceased to exist before the chargeable interest came into his hands.

Amendment agreed to.

Further Amendments made: In line 9, leave out 'granted or'.

In line 23, at end insert:
(4) In this paragraph "predecessor" means a predecessor in title of the chargeable owner, not being a person from whom that owner or any other predecessor in title of his derived title under a disposition for valuable consideration.

In line 25, leave out 'granting or'.—[Mr. Willey.]

Mr. Skeffington: I beg to move Amendment No. 155, in page 115, line 32, at the end to insert:
Provided that paragraphs 4 and 5 of this Schedule shall have effect in relation to any disposition assigning a related tenancy, as if in those paragraphs any reference to the chargeable interest were a reference to that tenancy.
Perhaps with this Amendment we could also take Amendment No. 175.
The effect of these two Amendments is to insert into Schedule 5, Part III, which deals with related tenancies, and the appropriate part of Schedule 8, dealing with compulsory purchase modifications, parallel provisions to Schedule 5(4) and (5), and Schedule 8(6). These concern the circumstances in which the consideration given for the last relevant

disposition must be prevented from being used as base value on an occasion following a chargeable act or event when appropriate account will have been taken of it.
All of these are cases where any "unexpended" consideration from the last relevant disposition is taken care of by way of a credit under the proposed new Schedule, that is credit carried forward from previous chargeable act or event or where a project or material development has begun which is Schedule 5(4), or where the previous chargeable act or event was of Case D or Case E and where land had been acquired by an authority possessing compulsory purchase powers and the compensation included compensation for the injury to the owner's remaining land.
Schedule 5(4) and (5) and Schedule 8(6) contain the general provisions for extinguishing the Schedule 5 base.

Amendment agreed to.

Mr. Willey: I beg to move Amendment No. 156, in page 117, line 25, at the end to insert:

Related tenancy assigned on or after relevant date

32.—(1) The provisions of this paragraph shall have effect for the purpose of assessing levy in Case C where—

(a) by a disposition made for valuable consideration on or after, but not more than six years after, the relevant date a tenancy which was subsisting on the relevant date is assigned to the chargeable owner and thereupon merges in the chargeable interest, and
(b) that assignment constitutes a chargeable act or event which is notified in accordance with the provisions as to notification contained in Part III of this Act.

(2) Where the preceding sub-paragraph applies, paragraphs 25 and 29 of this Schedule shall apply as if the tenancy had been a related tenancy within the meaning of Part HI of this Schedule and the assignment of the tenancy had been the last relevant disposition of it for the purposes of that Part of this Schedule.

(3) If, in a case where sub-paragraph (1) of this paragraph applies, the assignment is notified after a notice of assessment of levy in Case C has been served and has resulted in an operative assessment of levy, any person who has paid, or would be liable to pay, levy payable in accordance with the assessment may make an application in writing to the Commission for relief; and the Commission, having regard to the preceding provisions of this paragraph, shall give by way of repayment or otherwise such relief as is appropriate in the circumstances.

(4) Subsections (3) to (5) of section 54 of this Act shall have effect in relation to any application under the last preceding subparagraph as they have effect in relation to an application under that section, as if in those subsections any reference to varying the notice of assessment of levy by reducing the principal amount of the levy included a reference to discharging that notice and giving such consequential directions as the Lands Tribunal may determine to be appropriate.

This paragraph concerns assessment of levy in Case C, that is, projects of material development. It is possible that at the relevant date for the purpose of assessment—the date when the project is begun—there may be a tenancy subsisting in part of the land which the developer has not bought out; he may have entered into a contract to buy it or, in an exceptional case, may not even have a contract, but have taken the risk that he will be able to acquire the outstanding tenancy before he is ready to enter on the part of the land in which it subsists or he may have expected the tenancy to have expired before he needed the land.

By virtue of Clause 32(4) of the Bill, a tenancy of part of the relevant land in these circumstances would not be an assessable interest and the effect of this is that the liability of the developer will be assessed disregarding the tenancy—he will be treated as if he had already got rid of the tenant.

Mr. Graham Page: This seems very fair as the Minister has explained it. I am not quite sure whether the developer has to have a reversion of the tenancy, whether he has to have a material interest in land or whether he is just a developer. It is a situation which frequently arises, where the developer is buying up a number of properties and gradually allowing them to fall into possession, the tenancies ending and so on. The fact that he can be dealt with in this way, without waiting for a complete clearance of the land is very good. Does he have to be the reversionary tenant and own the land in that way?

Mr. Willey: I said that he would be taking a risk.

Amendment agreed to.

Schedule 6.—(CREDIT CARRIED FORWARD FROM PREVIOUS CHARGEABLE ACT OR EVENT.)

Amendment made: In page 117, line 26, leave out Schedule 6.—[Mr. Willey.]

Schedule 7.—(SUPPLEMENTARY PROVISIONS RELATING TO SCHEDULES 4 TO 6.)

Amendment made: In page 122, line 35, leave out 'to (6)' and insert 'and (5)'.—[Mr. Willey.]

Mr. Skeffington: I beg to move Amendment No. 159, in page 123, line 4, to leave out
'The preceding sub-paragraphs do' and insert 'Sub-paragraph (1) of this paragraph shall have effect for the purpose of calculating the value of anything which in accordance with sub-paragraph (a) or sub-paragraph (e) of paragraph 1 of this Schedule is to be taken into account in determining the amount of the consideration given or to be given for a disposition, as it has effect for the purpose of calculating the value of an interest in land; but, with that exception, sub-paragraph (11 of this paragraph does'.
This is a minor Amendment which will effect this change. Where land is acquired the consideration may include, or may be effected by a number of elements other than money. For example, the purchaser undertakes to become responsible for some debt of the vendor. Paragraph 1 of Schedule 7 is concerned to set out what part of the Schedule achieves that.

Mr. Graham Page: The wording here is rather peculiar. I am not quite certain what can be taken into account in these calculations. It is very right and proper that if the purchaser takes over certain debts of the vendor they should be taken into account as being consideration passing from the purchaser to the vendor. But the Amendment seems to go a lot wider than that by saying:
'Sub-paragraph (1) of this paragraph shall have effect for the purpose of calculating the value of anything which in accordance…is to be taken into account in determining the amount of the consideration given or to be given for a disposition…
That word "anything" seems to be very wide. It might mean services as well as some material consideration passing between the two. It does not seem to be a word of art to use in legislation.

Mr. Skeffington: I understand the point made by the hon. Gentleman. I was a little surprised myself, but I think that it is the only word that can be used for making provision for all the unquatified elements in consideration. If taken into consideration it seems fair that they should be allowed, and this is the only way in which the draftsman has been able to do it.

Amendment agreed to.

Further Amendments made: In page 123, line 9, leave out from beginning to 'as' in line 10 and insert 'the relevant Schedules';

5. Where for the purposes of any of paragraphs 22 to 25 of Schedule 4 to this Act, or for the purposes of paragraph 1(c) of this Schedule, account has to be taken of the capital value of a right to receive a rent or other periodical payment, that value shall be calculated by reference to the price which that right might reasonably be or have been expected to fetch on a sale in the open market at the time by reference to which the value falls to be calculated.

This is a technical Amendment.

Question proposed, That those words be there inserted in the Bill.

Mr. Allason: I beg to move, as an Amendment to the proposed Amendment, to leave out lines 5 and 6 and to insert:
'offered for sale in the open market by the owner, taking into account his liability for taxation on the rent received'.
This Amendment states that the right to receive rent shall be calculated by what it could fetch on the open market. I am very glad that this has been brought into the open. We discussed it in passing in Committee, but here it is in all its horror in black and white.
There will be individuals or institutions not subject to tax at all, or subject to reduced rates of tax. They will certainly be prepared to bid in those circumstances and, if bidding against each other, they will bid up to the limit, so that for them the value of the right to receive £500 a year for seven years would be £3,500. It is a bit far outside anything any ordinary taxpayer could consider bidding, but this would be the open market price because it would be possible to get that with keen competition among willing buyers.
A company distributing 50 per cent. of profits as dividend pays, I calculate, 52⅜ per cent. tax, which means that if the company has any rent it receives 47⅝ per cent. of the rent. The Surtax payer may pay as much as 91¼ per cent. tax, and on an investment in rent he would receive 8¾ per cent. of that rent. Yet the levy will be charged on the betterment element in the rent at the open market value, which may be 100 per cent. of the value of the right to receive the rent. In those circumstances, taking the element in rent which is concerned with betterment, a company, instead of receiving 47⅝ per cent. rent,

In page 123, leave out lines 18 and 19.—[Mr. Willey.]

Mr. Willey: I beg to move Amendment No. 162, in page 123, line 19, at the end to insert:
will be reduced to receiving 7⅝ per cent. rent. A surtax payer will pay 131¼ per cent. tax and levy combined on the betterment element of his rent.
2.0 a.m.
I cannot believe that it is the intention even of a Socialist Government to indulge in—I must not say taxation, because the Minister will not have it that the levy is taxation, but the removal of income from individuals or companies and its transfer to the Treasury by way of tax or levy. This is a very unfair way of carrying out a valuation of this type. It may have been the custom of valuers in the past.
Here again we are up against a very special condition. Usually when valuations are made, it is a matter of a transaction between a willing buyer and a willing seller. We would all agree that the Surtax payer in the circumstances I have described or the company in the circumstances I have described would certainly not be a willing seller. Therefore, it is unreasonable to invoke the willing buyer who is a person or corporation or a charity required to pay no tax at all. This is a very unfair provision.

Mr. Willey: I am sorry to appear so unsympathetic at this early hour of the morning. I must resist the Amendment. The hon. Gentleman anticipated my resisting it. It is necessary that the test should be the open market value, not the particular value to one person. In determining what the right to receive the rent might be expected to fetch, the valuer, and, in the event of appeal, the Lands Tribunal, must be left to take such, if any, account of tax as the market generally would do.

Amendment to the proposed Amendment negatived.

Proposed words there inserted in the Bill.

Amendment made: In page 125, line 40, leave out 'and (3)' and insert to (4)'.

Mr. Skeffington: I beg to move Amendment No. 164, in page 125, line 45, to leave out from the beginning to first 'paragraph' in line 48 and to insert:
9.—(1) For the purpose of assessing levy in Case A or Case B, where there is a tenancy of the relevant land together with other land and that tenancy, in so far as it subsists in the relevant land, constitutes (in Case A) the relevant interest or (in Case B) the chargeable interest.
With the agreement of the House, perhaps we could discuss Amendment No. 165 with this Amendment.

Mr. Deputy Speaker: If the House agrees.

Mr. Skeffington: In our discussions on 4th August I gave an undertaking—hon. Members will see this in column 923 of HANSARD—in response to an Opposition Amendment to our Amendment that, if the Opposition would withdraw their Amendment, which was a very tricky drafting point, we would endeavour to table a further Amendment to meet the substance of their Amendment. This my right hon. Friend has now done.

Amendment agreed to

Amendment made: In page 126, line 3, leave out from beginning to 'paragraph' in line 5 and insert:
(2) For the purpose of assessing levy in Case C, where there is a tenancy of the whole or part of the relevant land together with other land and that tenancy, in so far as it subsists in the relevant land, constitutes the relevant interest.—[Mr. Skeffington.]

Mr. Willey: I beg to move Amendment No. 166, in page 126, line 8, at the end, to insert:
10. Regulations may provide that development of any description specified in the regulations, which does not constitute material development in accordance with section 94(2) of this Act, shall be treated as material development for the purposes of paragraphs 3. 10. 20(5), 27 and 36(2) of Schedule 4 to this Act, and for the purposes of paragraph 8(2) of this Schedule.
The Amendment arises from the need, in some circumstances, to exclude from current use value values which might otherwise be present because of the obligation to assume in the calculation of current

use value that planning permission would be given for any development that was not material development.

Mr. Graham Page: The Minister did not read from his brief very well. I do not think that he knew what he was talking about any more than I did. I have read the Amendment and I am very frightened by it. In Clause 94(2) we go to great pains to define by regulation what is meant by material development and then tucked away in Schedule 7, like the town clerk's divorce tucked away in a Clause of a Private Bill, is this Clause about regulations which can materially alter the definition, not just for Schedule 7 but for Schedule 4. Paragraph 3 of Schedule 4 is one of the most vital in the the calculation of net development value for the purpose of the levy, and is the Bible, as it were, of Schedule 4, under the heading of "Base value". There are four paragraphs there which we have been gradually learning by heart.
Now we are told that the regulations can alter a material development for the purpose of that paragraph as well as for paragraphs 10, 25, 27 and 36(2) of Schedule 4. Therefore we shall have different definitions of material development throughout the Bill. I cannot see the need for that. Whoever drafted this and put the brief in the Minister's hand has some good cause for doing it, but I can see no reason for it at present. By means of a paragraph in the Schedule, it gives the Minister power to alter the Schedules and the way the levy is calculated, and to allow that calculation to proceed on an entirely different basis from the material development basis set out in the rest of the Bill, under regulations under Section 94(2).
Even at this early hour of the morning, I have an open mind and am willing to be convinced that this is the right thing to do, but on the face of it it seems dead wrong.

Mr. Willey: I readily respond to the hon. Gentleman's invitation. I thought that I had caught him nodding.

Mr. Graham Page: I may have looked as if I was.

Mr. Willey: It must obviously be wishful thinking. The circumstances that we have in mind are where statutory undertakers, local authorities and other bodies,


such as pipeline operators under the Pipelines Act, 1962, buy or lease land or take easements or wayleaves over it, either voluntarily or compulsorily, for the purpose of laying pipes or cables and so on. All such development will be excluded from the definition of material development, some of it because it falls within the General Development Order or because we propose to exempt it under regulations to be made under Clause 94(2)(c), such as the laying of pipes by pipeline operators. Such development is exempted from the definition of material development because it would be impossible to value, it cannot really be said to release development value for the benefit of the developer, and die Commission will not want to be bothered with innumerable notices of intention to start laying pipes and cables over the country.
However, where a body acquires land or rights over land to carry out such development it may pay very large sums of money because the development may substantially reduce or sterilise the development value of the land for other purposes. An example in an extreme case would be putting an electricity cable over land, making it impossible to build houses there. It could be argued that the compensation paid for this depreciation of value is, however, value given by the proposal to put the pipe or cable on the land and in that case, although the disposal to the authority was notified under Case A, B, E or F as appropriate, the current use value would equal the

5
'paragraph may provide that any provisions of the relevant Schedules specified in the regulations shall have effect subject to such exceptions and modifications, and together with any such additional provisions, as may be so specified for the purpose of assessing levy in respect of a chargeable act or event where—



(a) the relevant interest (or, in Case B, the interest of the grantor) is a tenancy or a reversion, or


10
(b) any disposition of which account has to be taken in accordance with Schedule 5 to this Act (other than a disposition which constitutes the chargeable act or event) is or was a disposition assigning a tenancy, or is or was a disposition of a reversion, or


15
(c) there has been a disposition granting, or a disposition renewing, extending or otherwise varying, a tenancy, in such circumstances that, in accordance with Schedule 5 to this Act, account would have been taken of that disposition if it had been a disposition assigning that tenancy, or


20
(d) a tenancy for a term of years certain has been terminated by the landlord, whether by notice, re-entry, forfeiture or otherwise, in such circumstances that in accordance with Schedule 5 to this Act, account would have been taken of that termination if it had been a surrender of the tenancy to the landlord for valuable consideration.'—[Mr. Willey.]

compensation paid, and no levy could be collected. This would obviously be wrong.

The regulations will, therefore, stipulate that value due to this sort of development is not to appear in current use value. It is impossible to set out in the Bill the sort of cases we have in mind, and for this reason we have to depend on the making of regulations.

Mr. Graham Page: I entirely disagree with this method of doing it. When I have been able to read the Minister's words in HANSARD, I shall, perhaps, be able to advise those in another place what to do about it.

Mr. Allason: This is a most unsatisfactory situation. The Minister has taken powers to himself to change the whole concept of the Bill as regards material development, though he says that he intends to deal only with the case of statutory undertakers. Would it not be very much better to say so? It is very odd to tuck it away so very obscurely here, changing the definition of material development in Clause 94. It is a bit hot. Will the right hon. Gentleman consider a manuscript Amendment—even if it is a torn one—in order to confine this to statutory undertakers and clearly limit it to the small range of items which he told us he intends to cover?

Amendment agreed to.

Amendment proposed: In page 126, line 10, leave out from 'this' to end of line 22 and insert:

Question, That the words proposed to be left out stand part of the Bill, put and negatived.

Question proposed, That the proposed words be there inserted in the Bill.

Amendment proposed to the proposed Amendment: In line 16, to leave out from 'by' to 'in' in line 17 and insert:
'notice (whether given by the landlord or by the tenant) or has been terminated by the landlord otherwise than by notice, whether by re-entry, forfeiture or in any other way, and (in any such case) has been so terminated'.—[Mr. Moyle.]

Mr. Skeffington: We are very happy to accept this Amendment.

Amendment to the proposed Amendment agreed to.

Proposed words, as amended, there inserted in the Bill.

Further Amendments made: In page 126, line 33, leave out from 'land' to 'and' in line 34.

In line 41, leave out '(a)'.

In line 42, leave out from "Schedules" to end of line 13 on page 127, and insert:
'to be taken'—

(a) of the rent payable under a tenancy comprising the whole or part of the relevant land together with other land, or
(b) of the consideration given or to be given for a disposition of, or under a contract comprising the whole or part of the relevant land together with other land,

the amount of the rent or consideration shall be apportioned, and the provisions in question shall have effect subject to that apportionment accordingly.
(2) For the purposes of the application of paragraph 25 or paragraph 28 of Schedule 5 to this Act to a related tenancy which was a tenancy of the whole or part of the relevant land together with other land—

(a) the previous current use value (as defined by that paragraph) shall be apportioned, and
(b) any reference in that paragraph to that value shall be construed as a reference to so much of that value as is apportioned to the relevant land or that part of the relevant land, as the case may be,

and the provisions of that paragraph shall have effect subject to that apportionment in addition to any apportionment required by subparagraph (1) of this paragraph.
(3) The preceding sub-paragraphs shall have effect without prejudice to any apportionment which, for the purpose of assessing levy in

respect of any chargeable act or event, is required by reason that an interest subsisting in the whole or part of the relevant land together with other land constitutes the relevant interest (or in Case B, the chargeable interest) only in so far as it subsists in the relevant land.
(4) In this paragraph 'apportioned' means apportioned as between the relevant land or part of it and other land and 'apportionment' shall be construed accordingly, and 'other land' means land not comprised in the relevant land.
13. Where any apportionment is required by paragraph 11 or paragraph 12 of this Schedule, or is required for any such reason as is mentioned in paragraph 12(3) of this Schedule, the apportionment shall be made in such manner as may be appropriate in the circumstances.'

In page 128, line 18, at end insert:

Modification of Schedule 5, paragraph 9, in relation to certain projects of material development
14. Where paragraph 9 of Schedule 5 to this Act has effect for the purpose of assessing levy in Case C, and the circumstances of the relevant project are such that paragraph 27(3) of Schedule 4 to this Act has effect in ascertaining the current use value of the relevant interest, the comparison to be made under sub-paragraph (2) of the said paragraph 9 shall be between—

(a) the current use value of that interest ascertained in accordance with paragraphs 27 and 28 of Schedule 4 to this Act, and
(b) the value which would have been the current use value of that interest if paragraph 27(3) of Schedule 4 to this Act had been omitted and that value had fallen to be ascertained in accordance with those paragraphs (subject to that omission) as at the date of the last relevant disposition or (where so required by sub-paragraph (3) of the said paragraph 9) at the time immediately after that disposition was made.

In line 21, leave out paragraph 14 and insert:
14.—(1) The provisions of this paragraph shall have effect for the purpose of assessing levy in respect of a chargeable act or event where—

(a) there was a previous disposition of part (but not the whole) of the chargeable unit, with or without other land not comprised in that unit, and
(b) that disposition would have been the last relevant disposition for the purposes of Part I of Schedule 5 to this Act if the chargeable unit had been limited to that part of it.

(2) In the circumstances specified in the preceding sub-paragraph, the base value of the relevant interest (or, in Case B, the base value realised by the disposition which constitutes the chargeable act or event) shall be ascertained in two ways, that is to say, it shall first


be ascertained apart from the provisions of this paragraph, and it shall then be ascertained separately—

(a) in relation to each part of the chargeable unit in respect of which the conditions specified in the preceding sub-paragraph are fulfilled, as if the chargeable unit had been limited to that part of it, and
(b) in relation to the remainder of the chargeable unit in respect of which those conditions are not fulfilled, as if the chargeable unit had been limited to that remainder of it.

(3) If in those circumstances, otherwise than in Case B, the aggregate of the base values as so ascertained separately is greater than the base value as first ascertained, that aggregate (instead of the base value as first ascertained) shall for the purpose mentioned in sub-paragraph (1) of this paragraph be taken to be the base value of the relevant interest.
(4) If in those circumstances, in Case B, the aggregate of the base values realised by the disposition which constitutes the chargeable act or event, when ascertained separately as mentioned in the last preceding sub-paragraph, is greater than the base value so realised as first ascertained, that aggregate (instead of the base value realised as first ascertained) shall for the purpose mentioned in sub-paragraph (1) of this paragraph be taken to be the base value realised by the disposition.
(5) In this paragraph 'the chargeable unit', except in Case C, means the relevant land, and in Case C means so much of the relevant land as is land in which the relevant interest subsists.—[Mr. Willey.]

Schedule 8.—(SPECIAL PROVISIONS AS TO ACQUISITION UNDER COMPULSORY POWERS.)

Mr. Willey: I beg to move Amendment No. 173, in page 130, line 1, after 'powers' to insert:
'in the circumstances specified in paragraph 2(1) of this Schedule'.
Paragraph 3 of Schedule 8 went too far in limiting Schedule 4 base value in every compulsory purchase under Case A to eleven-tenths of the current use value. This limitation is appropriate wherever compensation has been paid for severance or other injurious affection to other land because there such injury is covered by "the appropriate deduction" of Schedule 8, paragraph 2. To allow depreciation to the current use value of other land as in the normal Case A would in these cases mean giving a double allowance for such depreciation. But injury may occur to the current use value of the claimant's other land on compulsory purchase in circumstances where no payment for severance or injurious affection is made to him, and in this kind of case he must

be allowed the normal Case A depreciation factor in Schedule 4 base value. The Amendment achieves that.

Amendment agreed to.

2.15 a.m.

Mr. Skeffington: I beg to move Amendment No. 174, in page 130, line 27, at the end, to insert:
(4) Where immediately before the relevant date the relevant land, or part of it, had an unexpended balance of established development value for the purposes of Part VI of the Act of 1962 or for the purposes of the Scottish Act of 1954, then in calculating the current use value of the relevant interest for the purpose specified in sub-paragraph (1) of this paragraph that balance shall be treated as not having been extinguished or reduced by the operation, in relation to the disposition in question, of section 96 of the Act of 1962 or, as the case may be. of paragraph 1 of Schedule 6 to the Town and Country Planning (Scotland) Act 1959.
This is an important Amendment and I think it will commend itself to the House.
A cardinal factor in the scheme of the levy is that the "unexpended balance of established development value" of land, which derives from claims for loss of development value made under the Town and Country Planning Act, 1947, should belong to the landowner, and this result will be secured by the account we have taken of such unexpended balances in assessing the current use value of interests in land.
However, current use value for the purpose of Case A is assessed immediately after the disposition—Schedule 4, paragraph (3, 1)—at which time in the case of compulsory purchase the unexpended balance will have been extinguished by the operation of Section 96 of the Town and Country Planning Act, 1962.

This Amendment therefore keeps the unexpended balance alive for the purpose of including it in the current use value, and is therefore very much in the interests of the levy payer.

Amendment agreed to.

Further Amendments made: In page 131, line 8, at end insert:
7.—(1) Where apart from this paragraph a previous disposition of a related tenancy would be a relevant disposition of that tenancy for the purposes of the application of Part III of Schedule 5 to this Act to a chargeable act or event, paragraph 6 of this Schedule shall have effect for those purposes as it has effect for the purposes of the application of Part I of that Schedule, as if in that paragraph any reference


to the chargeable interest were a reference to that tenancy.
(2) In this paragraph 'related tenancy' has the meaning assigned to it by paragraph 22(2) of Schedule 5 to this Act.

In page 133, line 29, leave out from beginning to end of line 50 on page 134.—[Mr. Willey.]

Schedule 9.—(SPECIAL PROVISIONS AS TO LEVY IN CERTAIN CASES.)

Mr. Willey: I beg to move, in page 135, to leave out lines 4 to 43 and to insert:

GROUPS OF COMPANIES

Introductory

1. For the purposes of this Part of this Schedule—

(a) 'company' means a body which, being either a company within the meaning of the Companies Act 1948 or the corresponding enactment in force in Northern Ireland or a registered industrial and provident society, is resident in the United Kingdom;
(b) a principal company and all its subsidiaries form a group, and where a principal company is a member of a group as being itself a subsidiary, that group shall comprise all its subsidiaries;
(c) 'subsidiary' has the meaning which in section 42 of the Finance Act 1938 it is expressed to have for the purposes of that section, except that in the application of that section any share capital of a registered industrial and provident society shall be treated as within the definition of ordinary share capital, and 'principal company' means a company of which another company is a subsidiary; and
(d) 'registered industrial and provident society' means a society registered under the Industrial and Provident Societies Act 1965 or under the enactments repealed by that Act or registered under any corresponding enactment in force in Northern Ireland.

Dispositions within the group

2.—(1) Notwithstanding anything in Part III of this Act, a disposition made by a member of a group of companies to another member of the group, if apart from this paragraph it would constitute a chargeable act or event, shall be treated as not being a chargeable act or event for the purposes of that Part of this Act.

(2) Any provisions of sections 37. 41 and 42 of this Act which would be applicable apart from this paragraph shall not have effect in relation to any such disposition.

Liability for levy

3.—(1) The provisions of this paragraph shall have effect in relation to any chargeable act or event not falling within the last preceding paragraph, where—

(a) a notice of assessment of levy has resulted in an operative assessment of levy, and

the person who, apart from this paragraph, is liable to pay the levy is a member of a group of companies, and
(b) at the end of the period of six months beginning with the date on which, in accordance with section 50 of this Act, the principal amount of the levy or part of it falls due the amount so falling due or part of it remains unpaid.

(2) Subject to sub-paragraph (4) of this paragraph, the sum remaining unpaid as mentioned in sub-paragraph (1)(b) of this paragraph shall be recoverable by the Commission—

(a) from the company which at the relevant date was the principal company of the group, or
(b) from any other company which in any part of the period of two years ending with the relevant date was a member of the group and was then entitled to the chargeable interest.

(3) Subject to the next following sub-paragraph, section 53 of this Act shall have effect in relation to any amount recoverable by virtue of this paragraph.

(4) No action shall, after the end of the period of two years beginning with the date specified in sub-paragraph (1)(b) of this paragraph, be brought for the recovery of any sum which is recoverable by virtue of this paragraph.

(5) This paragraph shall have effect without prejudice to the recovery of any sum by the Commission otherwise than by virtue of this paragraph.

(6) In this paragraph, in relation to a chargeable act or event, 'the chargeable interest' has the meaning assigned to it by paragraph 2(1) of Schedule 5 to this Act.

4. A company from whom any sum is recovered by the Commission by virtue of paragraph 3 of this Schedule shall be entitled to recover the amount of that sum—

(a) from the company which is liable to pay the levy apart from that paragraph, or
(b) if that company is not the company which was the principal company of the group at the relevant date, from that principal company.

This Amendment is to give effect to an undertaking that I gave in the Standing Committee that transfers of land between members of groups of companies should not be liable for levy.

Provisions are also added for the prevention of evasion of the levy by collusion between members of a group of companies. I think that hon. Gentlemen will accept this as consequential to accepting the undertaking we gave.

For convenience, the new provisions are to be inserted as Part I of the Schedule to replace the provisions relating to close companies which are being replaced by an extension to the provisions in Part II dealing with connected persons.

Mr. Graham Page: I am very grateful to the Minister for bringing forward this Amendment and it now forms a separate part of one of the Schedules. I have had the opportunity, through the courtesy of the right hon. Gentleman, of studying the wording of this Schedule, and it seemed to me to cover all the points we had in mind in raising the question of group companies.
There is no doubt that the full purport of this had not been gathered when the Bill was first drafted, but now I am sure it has been gathered. I have had the opportunity of taking advice on it outside the House, which is something we like to do with complicated Schedules of this sort and have not had the opportunity of doing with some others put before us. I am happy to accept the Amendment.

Mr. Willey: I should like to thank the hon. Gentleman for his assistance.

Amendment agreed to.

Mr. Skeffington: I beg to move, Amendment No. 178, in page 136, line 40 leave out 'paragraph' and insert 'Part of this Schedule'.
I suggest that we discuss at the same-time Amendment No. 179, which is another rather long Amendment although the provisions follow very much from what has been said by my right hon. Friend. Again, the Amendment gives effect to an undertaking which was given in the Standing Committee as will be seen from columns 936–946 in relation to these matters.

Mr. Graham Page: I am grateful for the Amendment. Again, we on this side had an opportunity of looking at it to see whether it met the points which had been raised. It seems to do so. There were some serious points, and great hardship might have been caused if we had not had the Amendment.

Amendment agreed to.

Further Amendment made: In page 136, line 50, at end insert:
6.—(1) The provisions of this paragraph shall have effect in relation to any chargeable act or event falling within any Case other than Case C (in this paragraph referred to as 'the chargeable act or event') where—

(a) a notice of assessment of levy has resulted in an operative assessment of levy,

and the person who, apart from this paragraph, is liable to pay the levy is a company resident in the United Kingdom (in this paragraph referred to as 'the company'), and
(b) at the end of the period of six months beginning with the date on which, in accordance with section 50 of this Act, the principal amount of the levy or part of it falls due the amount so falling due or part of it remains unpaid.

(2) For the purposes of this paragraph a person is a contributory if, at any time on or after the relevant date (whether before or after the date specified in sub-paragraph (1)(b) of this paragraph) when he is a person connected with the company, he receives or becomes entitled to receive in respect of shares in the company any capital distribution from the company, other than a capital distribution representing a reduction of capital, and—

(a) where the chargeable act or event consists of a disposition made by the company and falling within any of Cases A, B, E and F, the capital so distributed derives from the consideration given for that disposition, or
(b) where the chargeable act or event consists of the accrual of a right to compensation falling within Case D or Case F, the capital distribution derives from the compensation received by the company in pursuance of that right.

(3) Subject to the next following sub-paragraph, the sum remaining unpaid as mentioned in sub-paragraph (1)(b) of this paragraph—

(a) if there is only one contributory, shall be recoverable by the Commission from him, and
(b) if there are two or more contributories, shall be recoverable by the Commission from all or any of them, as being persons jointly and severally liable to pay that sum to the Commission.

(4) The amount recoverable by virtue of this paragraph from any one person who is a contributory by virtue of a capital distribution made in the circumstances mentioned in sub-paragraph (2) of this paragraph—

(a) shall not exceed the amount or value of the capital distribution which he has received or has become entitled to receive, and
(b) shall not exceed a proportion of the sum referred to in the last preceding subparagraph which is greater than the proportion which his share of the total capital distribution made by the company in those circumstances bears to the whole of that distribution.

(5) Section 53 of this Act shall have effect in relation to any amount recoverable by virtue of this paragraph.

(6) This paragraph shall have effect without prejudice to the recovery of any sum by the Commission otherwise than by virtue of this paragraph.

(7) In this paragraph 'capital distribution' means any distribution from a company (including a distribution in the course of dissolving or winding up the company) in money or money's worth except a distribution which in the hands of the recipient constitutes income for the purposes of income tax.

7. A person from whom any amount is recovered by the Commission by virtue of the last preceding paragraph, as being a contributory in relation to a company, shall be entitled

After subsection (5)
…
…
…
…
…
Insert the following subsection:—








'(6) In Schedule 2 to this Act "local authority", in relation to England and Wales, has the same meaning as in the Town and Country Planning Act 1962, and, in relation to Scotland, has the same meaning as in the Town and Country Planning (Scotland) Act 1947'.

If it would be for the convenience of the House, Mr. Deputy Speaker, we could discuss at the same time the remaining four Amendments—Nos. 181, 245, 182 and 183—as they deal with the same point.

Mr. Deputy Speaker: I think that would be convenient.

Mr. Page: If I may give the background, these Amendments deal with the little form which, I have said, both in Committee and on Report, I hate, the little form which the conveyancers file at the Stamp Duty Office even though they do not have to stamp the conveyances. They fill up this little form, which we call "particulars delivered", under the Finance Act, 1931. As the Parliamentary Secretary has said, whatever they did with that form before—and I have my suspicions—they will use it now.
Unfortunately, in the Bill there were to be added to the form two questions which the solicitor would have to answer about the conveyance the particulars of which he was giving; they were on page 140 of the Bill and they were questions (viii) and (ix). In question (viii), the solicitor was asked to give for his client particulars
of any application which has been made for planning permission for any development of the land which is the subject of the transaction
and in answer to question (ix) he had to give particulars
of any development of that land intended to be carried out by the person by or on whose behalf the document is furnished.
To answer the first of these questions would have needed considerably more

to recover that amount from the company.—[Mr. Willey.]

Schedule 10.—(AMENDMENTS OF FINANCE ACT 1931.)

Mr. Graham Page: I beg to move Amendment No. 180, in page 138, line 33, at end insert:
investigation than is normally carried out in conveyancing work. In answering the second, the solicitor would have had to get elaborate instructions from his client, and on both of them he would have had to get elaborate instructions from the vendor.
The really unsavoury part of this is that there are criminal penalties for not completing the form correctly. To place difficult questions like that in the form was laying both the solicitor and his client open to criminal prosecution if they failed to complete the questions.
After discussion with parties concerned, such as the Law Society and the Ministry, a form of words has been found which put the questions satisfactorily into one question. Those words appear in the Amendments. I would rather do without them at all, but because I know that the Minister requires them to make the Bill work—we have, of course, cooperated throughout to make the Bill work, much as we hate it; this is the last chance on Report that I shall get to say this, so perhaps the Minister will bear with me—here is a bit of machinery for the Bill. It is a horrible Bill, but we will provide the machinery and try to keep it oiled so that the machine will work. I hope that the House will accept the Amendments.

Mr. Willey: I rise only to say that the Government accept this Amendment, and that I am much obliged to the hon. Member for Crosby (Mr. Graham Page) for his co-operation and assistance. I forgive his last partisan remarks, and I should like to record our appreciation of the very hard and diligent work which


he and his colleagues have put in during our consideration of the Bill. This is a very heavy piece of legislation, and it is a remarkable achievement to have got it through Standing Committee in 21 days and Report stage in two days.
I am much obliged to the hon. Gentleman for the co-operation which he has given, though not giving his agreement to the Bill.

Mr. Graham Page: If I am still in order, may I pass the bouquets back across the Dispatch Box? We appreciate the courtesy which we have had from the Minister and the Parliamentary Secretary throughout this Report stage. Although we have fought over the content of the Bill, we have co-operated in the procedure of the Report stage and earlier in Committee. I hope that the happy relationship which there has been between the two sides will not be taken against us or as any retraction from our dislike of the Bill.

Amendment agreed to.

Further Amendments made: In page 139, column 1, to leave out line 5.

In page 139, column 2, to leave out lines 3 to 14 and to insert:
'For the word "or" where it last occurs there shall be substituted the words" and
(viii) of the information given to the transferee or lessee by any local authority in reply to any request made in connection with the transaction whereby that authority was requested to state what entries (if any) relating to the land to which the transaction relates were shown in any register kept by that authority under section 19(4) of the Town and Country Planning Act 1962 or (where the land is in Scotland) under section 12(5) of the Town and Country Planning (Scotland) Act 1947"'.

Schedule 11.—(SCHEDULE 2 TO FINANCE ACT 1931, AS AMENDED.)

In page 140, line 9, at the end to insert: 'and'.

In page 140, to leave out lines 10 to 15 and to insert:
(viii) of the information given to the transferee or lessee by any local authority in reply to any request made in connection with the transaction whereby that authority was requested to state what entries (if any) relating to the land to which the transaction relates were shown in any register kept by that authority under section 19(4) of the Town and Country Planning Act 1962 or (where the land is in Scotland) under section 12(5) of the

Town and Country Planning (Scotland) Act 1947.—[Mr. Graham Page.]

Bill to be read the Third time upon Monday next.

PUBLIC TRANSPORT SERVICES (WYCOMBE)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fitch.]

2.28 a.m.

Mr. John Hall: Mr. Speaker, I must apologise to you and to those hon. Members who may be called upon to remain for detaining you after this very long sitting. It is only because the matter on which I have to speak is of some importance to my constituency that I venture to do it at all.
This is one of the very few occasions on which there is something to be said for the habit which I understand is followed by the American Congress, where one can write a speech into the official record. This is an occasion on which I wish that I could have done that, and I am sure that the Minister has a prepared speech in reply which could have been written in as well, enabling us all to get home a little earlier.
As I cannot do that, I want to put before the Minister the case for my constituency. At the outset, I should make it clear that I am dealing mainly with road transport within my constituency, and not with the rail facilities which serve it. The rail facilities are another problem altogether, and I do not think that the improvement of those rail facilities within the constituency would do very much to solve the problem which I wish to draw to the attention of the Minister.
The main population centres in the constituency are High Wycombe and the rapidly growing Flackwell Heath in the south-east, Marlow in the south and Princes Risborough in the north. Numerous villages and hamlets over the area of some 150 to 160 square miles constituting my constituency look, in the main, to those population centres because they are the shopping and social centres, although there are some villages and hamlets in the north and south, which look to Aylesbury and Henley respectively.
In the main, these centres are linked by bus services largely provided by the Thames Valley Traction Company. There are, as in most constituencies of this kind, villages which have no bus service at all. The village of Dunsmore, high above Chequers, which is in my constituency, has no bus service and never has had as far as I am aware. There are people living on that hill who have never been further than Aylesbury. In my own village of Marsh we have a bus service two or three times a week and we manage to adapt ourselves to it. Inadequate as the services have been, they have been reasonably reliable and they have met the basic needs of the community. But over the last two or three years the services have become chaotic. It is mainly a question of services failing to run. I have had a mounting volume of complaints from constituents and local authorities about the deterioration in the transport facilities.
The major complaint has been that services fail to run. Buses on scheduled services do not turn up and this produces disastrous results. The last bus might not materialise and one is left stranded or one may have to wait for many hours. Workmen are late for work and lose time because the bus on which they rely does not appear. People miss their trains and their appointments, but more serious is the fact that in lonely country areas women sometimes have to wait for an hour or more.
A further complaint which I have received relates the reduction of services and inadequate connections. I can understand the reason why the Thames Valley Traction Company Limited has to reduce some services and finds difficulty in maintaining proper connections between one town and another but this can lead to difficulty and hardship. I had one example given to me recently. A lady constituent has to take her child to a hospital for dental treatment. High Wycombe hospital does not have a dental department although it will have in due course. This lady takes her child from Hughenden to Stoke Mandeville, a distance of 10 miles. To get to her appointment at 2 o'clock she has to leave home at 10 o'clock. It takes four hours to travel 10 miles and she does this week after week. There are many people in a similar position. To travel in my constituency by bus

one has to start very early to make sure one gets a connection.
Representations have been made to the bus company by High Wycombe Borough Council and High Wycombe Rural District Council, myself and others. The company has been co-operative but it has indicated its helplessness in the face of a shortage of staff and increasing traffic congestion. Neighbouring areas are suffering from similar problems.
Early in 1965, Eton Rural District Council initiated a meeting with other local authorities to try to overcome the problem. Following the meeting a resolution was sent to the Minister of Transport, which said:
That this meeting, representative of eight local authorities of urban and rural areas, recognises that bus services are deteriorating to a point where they are neither economic nor adequate services, and requests the Minister of Transport to institute a full inquiry to determine:—

1. The present and possible future needs for buses;
2. How these needs may be economically met."
That was sent to the Minister of Transport, and at a further meeting held by these eight local authorities it was decided to ask the Minister to receive a deputation from them, accompanied by the hon. Members who represent those constituencies. The Minister declined to receive such a deputation, and although I believe that my hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) and others have been pressing this for some time, so far they have not met with any success. In July of this year the High Wycombe Borough Council and Rural District Council, and Marlow and Beaconsfield Rural District Councils decided to support the action of the Eton group. They pressed for a meeting, but still without success.
I appreciate that this is a national problem, and not only a local one, but it is one which must be solved, because the deteriorating transport service is doing two things: first, it is forcing those who can afford to do so to buy cars, or to use cars, thereby adding to the congestion on the roads when otherwise they would be satisfied to use public services. Secondly it is forcing people who have no transport of their own out of the rural areas into the towns. If people live in areas where there are no public transport


facilities and it is necessary to have some form of transport to get into nearby towns, there is constant pressure, especially by the women folk, for the family to move into a town where they are nearer the facilities which they require.
I have no immediate solution to offer, and I appreciate that it is a very difficult problem. I suggest that we might examine the possibility of introducing small one-man minibuses which might deal with some of the services. We might be prepared to grant more private licences and see whether some individuals might be prepared to run bus services over some of the routes. Above all, we must make sure that we stabilise the existing services so that when there is a timetable it is kept to. We must make sure that if a bus is supposed to run on a certain day at a certain hour, it turns up. If the bus service in my village was as irregular as it is in many parts of my constituency, I should wait for the bus on Wednesday and not be able to get it until the following Friday, because if the bus did not come on Wednesday there would not be another one until Friday. This situation is not tolerable, and I ask the Minister to respond to the request which has been made to him by those local authorities and meet them to see whether it is possible to find some solution to the problem.
The hon. Gentleman may feel that this is a problem which should be solved by private bus companies operating over these routes, but they are, in the main, faced with problems outside their control. They are faced with labour shortages, about which they can do little, and with the problem of traffic congestion, which again is a matter which can yield to some extent to Government policy.
I urge the Minister to change his mind and be prepared to receive a deputation from these local authorities, accompanied by the hon. Members concerned, so that together we may try to find some solution to this difficult, and in my constituency serious, problem.

2.39 a.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Stephen Swingler): The hon. Member for Wycombe (Mr. John Hall) has painted a

picture which, I regret to say, is characteristic of many parts of the country. As the hon. Gentleman said, this problem is not new to us in the Ministry. I know from personal experience and from my constituency, quite apart from the correspondence which I have received, that the kind of difficulties which the hon. Gentleman has described with regard to transport services in the rural areas are being experienced in many parts of the country.
The Ministry not only has the utmost sympathy with the people who are suffering inconvenience and hardship on account of the shortcoming of public transport in these areas, but we are determined that some changes must be made to reverse the trends of recent years in the deterioration of public transport in these areas.
The problems affecting the bus industry are well known and I will summarise them briefly. First, I will give some local illustrations of the position. Many bus operators are today especially affected by shortages of staff. It is the shortage of staff that so often accounts for the unreliability of the scheduled services. Secondly, services in the urban areas are suffering from increasing traffic congestion, and are therefore deteriorating. Thirdly, their costs, especially their labour costs, have risen steeply in recent times. On the other hand, the number of passengers being carried has fallen because of the increased competition from private cars, with the spread of car ownership.
The hon. Member's constituency poses some particular problems in this respect. His constituency, geographically, is largely rural, and shares the problems that affect rural areas in general. In addition, it lies on the fringe of the London area, with the special problems which that contiguity raises. High Wycombe itself is an important urban centre that is suffering from the usual problems of congestion. There are two principal bus operators here, both under national ownership—the Thames Valley Traction Company, whose services cover most of the constituency, and the London Transport Board, whose services are confined to the south-eastern portion of the area, particularly in the immediate vicinity of High Wycombe.
The Ministry, on account of representations made by the hon. Member and other Members in this area, has been in close touch with those operators, although I must make it plain—as I so often have to do on Adjournment debates—that the Ministry is not running buses. We are not operating managerially the services provided. That is the reason why the Minister sometimes resists receiving deputations on subjects which have to do with the day-to-day managerial and operational problems of those who are charged with the responsibility of providing services.
The Thames Valley Traction Company, at its High Wycombe Depôt, is at the moment suffering a shortage of 16 per cent. of the complement of drivers and 18 per cent. of the complement of conductors which it requires to operate the necessary services. We know that recruitment in the bus industry is difficult today, particularly in places where more attractive alternative employment is available, and it is especially difficult to keep and recruit staff where housing shortage is a deterrent. This shortage of staff means that those operators have no spare crews available, so that if members of the staff do not turn up because of illness, delay, or something of that kind, services cannot be covered and have to be withdrawn at very short notice, or without any notice.
I understand that the Thames Valley Traction Company has tried to overcome these difficulties in a variety of ways—for example, by the introduction of one-man operated services, which my right hon. Friend is extremely interested to encourage and about which she has issued new regulations. Five such services are now operating in the Aylesbury—High Wycombe—Marlow area. When all else fails, the company has had to streamline its operations in the worst-affected areas by the straightforward reduction of those services which are in least demand. These reductions have led recently to improved reliability, but the company is exposed to emergencies, like an increased rate of sickness, which are beyond its control.
Let me put the matter in perspective. A year ago, the company operated 14½ million vehicle miles a year. Over the past 12 months, it has reduced its services by less than 250,000 vehicle miles

over the whole area, 70,000 miles of the reduction in the High Wycombe district.
There has been a 10 per cent. shortage of drivers in L.T.B. garages serving the High Wycombe routes for some time, and during the summer it reached the serious figure of 17 per cent. It has now fallen, however, to below 5 per cent., and is no longer regarded by the London Transport Board as a serious problem. We therefore hope—this might be some crumb of comfort to the hon. Gentleman and his constituents—that this improvement can be maintained, to make the services more reliable. The L.T.B. has heavy responsibilities in this area and the maintenance of its services is a matter of management for the undertaking, subject to the statutory licensing and consent procedures.
Traffic congestion is one of the most serious problems for bus operators, particularly in this area. It is particularly bad in High Wycombe itself and has a cumulative effect over a wide area. Unfortunately, there is no suitable diversion for traffic on the A40 trunk road through the town centre. This seriously affects local traffic at rush hours and on week ends and holidays. It causes particular difficulty for the Thames Valley service from Aylesbury and Windsor, which has now had to be split at High Wycombe and operated in two separate sections, with some obvious disadvantages.
The position should improve substantially, however, over the next two years, when the motorway by-pass and the inner relief roads in the town have been built. In the meantime, as a result of discussions which we have had to ease the congestion, the borough council has introduced several waiting restrictions on the A40 in the centre of the town.
In the White Paper on transport policy issued by my right hon. Friend in July, we recognised that public transport must be strengthened by more than one method of approach. This applies to the tackling of the problem in all areas, including the hon. Gentleman's. We are determined to focus all our efforts on a number of things. First of all, we must achieve technical improvements. Technical improvements in public transport can offset the comparatively high labour costs of bus operations, especially the extension of one-man operation. My right hon. Friend is extremely keen to bring about


the extension of one-man operation and the technical improvements involved. She has, therefore, set up a working group of operators, manufacturers and trade union representatives to examine all the technical and operational problems. We hope to get a move on in raising the standard of technical operation to reduce the comparative costs.
Secondly, we want to bring about a better co-ordination of the services, between different bus operators and between bus and rail operators. That is why my right hon. Friend has enlisted the help of the regional economic planning councils in determining the best machinery for the achievement of this co-ordination. We are proposing, in the short-term, voluntary co-ordinating committees at regional level, including the representatives of regional councils, transport operators of all kinds, local authorities, users and trade unionists. My right hon. Friend has invited nominations for membership of these regional transport co-ordinating committees and will, within the next couple of weeks, have another meeting with the chairmen of the regional economic planning councils. We want to get these committees set up throughout the country as rapidly as possible, to build on the operators' already existing machinery and experience in trying to bring about a better co-ordination of the use of available resources.
Thirdly, we must use traffic management measures throughout the country to enable the buses to operate more efficiently. One reason why we want these regional transport co-ordinating committees in areas like Buckinghamshire is to advise us better on the kind of traffic management measures that could be directed to assisting the operation of public transport in the most efficient manner.
Fourthly, the Government have announced plans to deal with the problem of rural buses. Where bus services decline under the pressure of diminishing demand, combined with rising costs, the problem of the minority who do not have access to cars and who need public transport on social grounds must be tackled in a radical way.
The Government see this as a problem in which the local community must take a hand. The White Paper proposes

financial assistance by local authorities and central Government jointly in cases where there is a need which cannot be reasonably met otherwise. The local authority associations have been asked for their views on the working out of the proposed legislation for this and I take the point made by the hon. Gentleman about mini-buses and so on. Conventional bus services are not necessarily the answer where the remaining public need is small. A working party, including the representatives of local authorities and bus operators, is exploring alternatives, such as welfare car pool schemes, the better use of school buses and an extended use of G.P.O. mail vans by fare-paying passengers, and other things of that kind.
We hope, after the next few months, to be able to report measures which we will take in this sphere, combined with the introduction of the powers given to local authorities and my right hon. Friend, to make grants, enabling rural public transport to be maintained. As the House knows, the Ministry of Transport and the London Transport Board are undertaking a joint survey of the London Transport Board's financial needs and commercial policies and the operating and management problems arising from them.
This review is being carried out with the help of outside consultants, whom we have appointed under the guidance of a directing group over which I am presiding. This group includes three senior officials from the Department, three representatives from the Board, including the Chairman, and three independent members. We hope to complete this review by about the middle of next year. Among the other things which the consultants have been asked to consider urgently is the examination of changes in the operating practices of the London Transport Board, which might affect either the profitability or the social usefulness of the bus services provided.
We agree with the hon. Gentleman that for much too long public transport has been allowed to decline, to the great inconvenience of those who rely upon it and to the detriment of the community as a whole, and especially to those communities in remote urban areas or those communities in areas where traffic congestion has become a very urgent problem. I hope that we have shown in the White


Paper on Transport Policy that we are determined to strike at the roots of this decay. We are determined to rehabilitate public transport and to expand it. We have undertaken to introduce legislative proposals to enable assistance to be given, through local authorities as well as central Government——

The Question having been proposed after Ten o'clock on Thursday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at two minutes to Three o'clock a.m.